• The global IPO market has slowed down, but we may yet see some blockbuster listings this year
  • Evergreen Lithium IPO last week headlines the ASX’s best IPO stock this year
  • We take a look at the upcoming IPO stocks on the ASX

 

The global IPO market has significantly declined in 2023 as investors tighten their purse strings. But the year isn’t over and we may yet see some blockbuster listings later in the second half.

The once serial loss-making Virgin Australia Airlines has been tapping its bankers for a potential listing comeback later this year as it bets on a recovery in domestic travel.

Virgin Aust CEO, Jayne Hrdlicka, said that Virgin has finally been making profits – “roughly 5 per cent” on its 2023 first-half revenue of $2.5 billion.

There’s been reports however that the Virgin Australia roadshow, planned for this week, is being rescheduled.

“Due to unforseen circumstances, the Virgin Australia non-deal roadshow (NDR) will be rescheduled. The joint lead managers will contact investors with details of the updated NDR dates,” said a note circulated on Monday.

In the US, investors have circled Q4 2023 as the period where we may see tech IPOs start flowing again. Analysts believe there will be  some potential blockbuster IPO listings in the horizon.

Stripe, the US$95bn online payments company, is long due for a listing and analysts say it could go public anytime.

Stripe was founded by brothers Patrick and John Collison in 2010 and rose dramatically during the pandemic boom from the pickup in e-commerce.

Elon Musk’s SpaceX has always been on everybody’s tongue for a potential listing.

A recent report by Bloomberg said the company is likely to be valued around the US$143 billion if it was to go public.

SpaceX has been expanding rapidly, and back in December, has passed the 1 million subscribers to its satellite-based Starlink internet service.

 

Best and worst performing IPOs in 2023

On the ASX, a blockbuster listing also hit the bourse last week.

Evergreen Lithium (ASX:EG1) went live last Tuesday after a $7 million IPO that had shares priced at an ambitious $0.30 a pop.

The share price finished at $0.36 on Day 1 for a 20% return, but has today surged to $0.46 for a whopping 90% gain.

Evergreen’s flagship Bynoe Project is adjacent to, and on trend with, Core Lithium’s producing Finniss Project.

But chief technical advisor Jason Ward says the flagship Bynoe project is more than just about being next door to a big deposit.

“It’s not simply a nearology play, they’re contiguous geochemical samples to their mine,” Ward told Stockhead.

“Right up in the north where they’re mining the Grants deposit, we see some northeast trending features and that correlates well with our lithium in soil anomalies there.”

Apart from Evergreen, Leeuwin Metals (ASX:LM1) has also performed well – returning 44% for the IPO bagholders to date.

Leeuwin has projects in Canada and Western Australia which are prospective for nickel, copper, PGE and lithium.

In Canada, projects include the William Lake nickel project and Jenpeg lithium project in Manitoba and the Ignace lithium project in Ontario.

William Lake is the flagship, located in the world-class Thompson Nickel Belt and includes historic results of 17.09m at 1.48% nickel and 12.7m at 1.86% nickel.

In Western Australia, the company holds lithium and REE projects near Marble Bar and in the Gascoyne where reconnaissance work is under way.

Meanwhile, other ASX IPO stocks in the Class of 2023 have not performed to expectations:

Code Name IPO Price Current Price Return Day 1 return Market cap Listing date
EG1 Evergreen Lithium $0.25 $0.47 88.00% 20.00% $26.43m 11/04/2023
LM1 Leeuwin Metals $0.25 $0.36 44.00% -4.00% $14.5m 29/03/2023
PL3 Patagonia Lithium $0.20 $0.20 0.00% 10.00% $9.8m 31/03/2023
HTM High-Tech Metals $0.20 $0.20 0.00% 2.50% $4.93m 23/01/2023
DYM Dynamic Metals $0.20 $0.17 -15.00% -5.00% $5.95m 16/01/2023
ACE Acusensus $4.00 $3.40 -15.00% 0.00% $85.73m 12/01/2023
GHY Gold Hydrogen $0.50 $0.40 -20.00% 2.00% $20.4m 13/01/2023
SQX SQX Resources $0.20 $0.15 -25.00% -15.00% $3.75m 20/02/2023
VHM VHM Limited $1.35 $0.86 -36.30% -15.60% $128.03m 09/01/2023
ADC Acdc Metals $0.20 $0.10 -50.00% 0.00% $4.67m 17/01/2023
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Upcoming IPOs on the ASX

All dates are sourced from the ASX, and could change without notice.

 

MINING GREEN METALS (ASX:MG1)

Expected listing date: 10 May, 2023

IPO: $5m at $0.20

This explorer has a suite of green metal projects (either owned or optioned) including lithium, PGEs, nickel, vanadium and uranium in the attractive mining jurisdiction of Western Australia.

The Coats PGE, nickel, copper and vanadium project is 20km SSE of Chalice Mining’s (ASX:CHN) Julimar project.

The Lake Johnston lithium and nickel project is close to Wesfarmers (ASX:WES) and SQM’s Mount Holland Lithium Mine, as well as the historic Maggie Hays/Emily Ann Nickel deposits held by Poseidon Nickel (ASX:POS).

Then there’s the Nowthanna uranium-vandium project, which is adjacent to Toro Energy’s (ASX:TOE) Nowthanna project.

 

NGX (ASX:NGX)

Expected listing date: 17 May, 2023

IPO: Around $9.56m at $0.20 per share

NGX is Sovereign Metals’ spin-out of its Malawi graphite assets, which Sovereign said would allow it to focus on its Kasiya rutile project – “the largest natural rutile deposit in the world”.

Under the spinoff deal, Sovereign shareholders are entitled to one NGX share for every 11 Sovereign shares they hold, with the IPO allowing them to participate in purchasing one new NGX share for each NGX share held.

Graphite itself is having its day in the sun due to increasing demand driven by electric vehicle battery makers.

While graphite prices have not moved to the same extent as other battery metals so far in the electric vehicle boom, a major gap is emerging between supply of battery graphite and demand.

That is only set to rise with EV penetration, given graphite anode material makes up significantly more of the metal content of the battery than lithium.

Upon listing, NGX holders will take full ownership of the advanced Malingunde project, which already boasts a measured, indicated and inferred resource of 65Mt at 7.2% total graphitic carbon for 4.68Mt of contained graphite, more than half of that in the higher measured and indicated categories.

They will also pick up the Duwi project, just 15km east of the Malawian capital of Lilongwe.

 

XLR8 Metals (ASX:XL8)

Expected listing date: 2 June, 2023

IPO: $4.5m to $5.5m at $0.20 per share

Nickel is one of the critical metals which plays an instrumental role in the energy transition and it’s likely that the electrification of transport will see nickel prices remain strong over the coming decades.

XLR8 Metals, which is currently finalising an IPO to list on the ASX, is also a firm believer in nickel and has put together a suite of projects in both Tanzania and Sweden that places it in the perfect position to supply nickel into Europe.

Executive chairman Shannon Green told Stockhead that the latter presented an enormous opportunity to get deeper into the EV supply chain.

“The EU is at the very advanced stage in the process of bringing in a mandate to cease production of ICE vehicles in the mid 2030s, and they are a significant global player in the vehicle manufacturing space and are therefore going to need to source significant long life supplies that are stable and accessible,” he said.

Meanwhile, XLR8 holds 2,162km2 of granted tenements and tenement applications in five separate project locations in Tanzania, which is well known for being home to some truly monstrous nickel projects.

XLR8’s footprint in Sweden is significantly smaller with five tenements – two granted and three in the advanced application stage – covering about 42km2 but which are no less attractive given that they have proven mineralised nickel sulphide systems in the rich Västerbotten nickel zone.

 

DY6 Metals (ASX:DY6)

Expected listing date: 8 June, 2023

IPO: $7.0m at $0.20 per share

DY6 Metals non-executive chairman, Dan Smith, says Malawi holds promise as a potential REE hub given the cluster of high-grade rare earth projects already in the region, the stable political environment, government support, and infrastructure.

“It’s a jurisdiction where there’s a push for foreign investment and we’ve seen that with a number of our peers operating in the country,” he says.

Now read: DY6 Metals – Tapping into Malawi’s underexplored rare-earths potential

With $2.5m secured from two Hong Kong-based cornerstone investors – Zhenshi Group and Zhung Nam New Material Company – DY6 Metals is looking to raise up to $7m at $0.20 per share by the time the offer closes in early June.

“We were able to negotiate a great deal with the vendor of the projects and come on with a relatively low enterprise value of $3.4 million compared to our peers,” Smith adds.

“Outside of Australia, China and Brazil,  Africa is really the place to be for these types of rare earth projects and we can’t wait to get on the ground and start exploring.”