Capital Raisings Recap: 2021 has begun with a bang with nearly $2bn raised

2021 is set to be another big year for ASX capital raisings with solid volumes so far in 2021.

In the first nine weeks of the new year, ASX companies have raised over $1.96 billion.

Although this is lower than the $3 billion raised in the first two months of 2020, that figure was skewed by two deals worth $1.5 billion by large caps Coles (ASX:COL) & Orica (ASX:ORI).

Furthermore there were only 104 deals completed in the first two months of 2020, but 135 in 2021.

While 90 per cent of capital raised was through placements, the IPO market has been healthy.

There have been nearly double the number of IPOs compared with this time last year with eight in the first two months of 2020 and 15 in the first two months of 2021.

2021’s class of IPOs have been performing better than their peers at this time last year. In early March 2020, the average IPO in the preceding 12 months was only up 5.5 per cent as at March 9 2020. But as of yesterday, 2021’s IPOs were sitting on an average gain of 34 per cent.

The resources sector raised more capital than any other sector at approximately $749 million.

Here’s a list of all ASX capital raisings so far in 2021…

(Data includes deals completed up to March 4 and excludes withdrawn or pending deals)

The biggest deals

The biggest deal was the Bank of Queensland (ASX:BOQ) which completed a $673 million placement only last week as part of its efforts to acquire ME Bank.

It will top this up to $1.3 billion with a rights issue which it is currently completing.

Taking silver and bronze spots are high-flying battery metals stock Vulcan (ASX:VUL) and PNG-focused gold play Geopacific Resources (ASX:GPR) which raised $140 million and $120 million respectively.

The former of these stocks has grown from 18 cents to over $6 per share over the last several months.

It initially listed in 2018 as Koppar Resources and was focused on a base metals project in Norway but pivoted to a lithium project in Germany and has never looked back.

Big deals in other sectors included $50 million raisings by tech stock BetMakers (ASX:BET) and IOUpay (ASX:IOU).

BetMakers has skyrocketed from 4 cents two years ago to over 90 cents today as it has entered the US betting market. And half of its $50 million came from industry heavyweight Matthew Tripp – the co-founder of Sportsbet and BetEasy.

IOU has also skyrocketed as it has entered the BNPL space in South East Asia. Starting with Indonesia and Malaysia, it will use the proceeds to expand its digital offerings to the region.

One deal that was smaller but had a hefty impact was Bevan Slattery’s $2m investment into Rent.com.au (ASX:RNT) which has products for the rental market including bond financing and tenant checks.

Slattery bought $2 million at 5 cents per share and his endorsement of the platform sent shares as high as 30 cents in a handful of days.

The busiest brokers

The broker that has raised the most capital was Canaccord Genuity which has raised $278.56 million.

Canaccord’s deals include Vulcan (ASX:VUL) and Betmakers (ASX:BET).

Tied in second place are Jarden Partners and Macquarie which have accounted for $150 million each.

Following them are Goldman Sachs with $97 million and Bell Potter (which is listed on the ASX as Bell Financial Group (ASX:BFG)) with $94 million.

Will the ASX capital raising bull run last in 2021?

This is a question Stockhead has consistently put to money managers in recent weeks.

The general consensus is investors, both sophisticated and retail, are hungry to invest but there’s no guarantee they won’t pivot to other investment options eventually.

One was Canary Capital’s Joe Durak, who notes the equity capital markets (and by extension sophisticated investors in Australia) have shown similarly positive signs.

“It’s still early days but there still seems to be a lot of appetite around,” he said.

“Normally January would be fairly quiet, but there’s still a lot of IPOs coming through and obviously strength at the small/micro cap end of the market.”

Durak also noted that virtual meetings, a trend accelerated by COVID-19, has made it easier for companies to raise money.

Another was Auctus’ (ASX:AVC) Campbell McComb who told Stockhead last week some of Auctus’ clients were hungry to invest but had perceptions public markets may be overvalued.

“I think investors are certainly keen on those sort of 3-4 year transactions where there’s some solid, 20+ per cent returns,” he said.

“They’re looking at equity markets more generally and perhaps looking at them as a touch overvalued.

“The multiples paid in the private market seem to be lower than listed market so there’s greater value and therefore greater return across that 2-5 year frame.

“So we’ve seen quite a bit of demand across a lot of our funds and we expect that to continue over the next year or two.”

At Stockhead, we tell it like it is. While IOUpay is a Stockhead advertiser, it did not sponsor this article.