Miss out on another IPO? Here’s why retail investors get dudded in ASX floats
Vital Harvest’s IPO closes at the end of the week and it’s unusual: it’s allowing retail shareholders to easily participate in part of the offer.
The real estate investment trust is raising $185 million most from institutional investors, but has reserved $10 million for ordinary Joes.
Typically initial public offerings by mature, less risky companies are taken up by institutions and friends of the investment bank advising on the deal, says Australian Shareholders Association boss Judith Fox.
“It’s one of the things we’ve been concerned about for some years now,” Ms Fox told Stockhead.
“It’s particularly the large profitable companies that the investment banks offer access preferentially to professional shareholders and their institutional clients.”
>> Scroll down for a table showing how 83 ASX floats have performed in the past year
If retail shareholders do get a look in, it’s only because they are associated with the right broker which is handling the usually-small retail share allocation.
Vital Harvest isn’t acting out of altruism though.
Chair Liza Whitmore said the berry and citrus farmer was after stamp duty relief.
Victoria and South Australia said yes, but Tasmania stipulated that it would only do a tax deal if part of the IPO was thrown open to everyone in a general offer, rather than just through brokers.
The $175 million raised from institutions has already been sold and was oversubscribed. The $10 million retail offer closes on Friday. More info here.
Retail investors struggle for access to IPOs
The concern of the Shareholders Association is that retail investors are shunted into smaller and riskier investments when mature IPOs are pre-sold to institutions and professional investors — sometimes before the prospectus has even been issued.
A scan of the 45 or so IPOs listed on OnMarket, a platform which provides open, non-broker access to IPOs to retail investors, suggests only about eight have reasonable revenue figures or a profit.
Ben Bucknell, chief of IPO marketplace OnMarket, has been lobbying for a rule change to give retail investors a minimum 25 per cent of shares offered in all initial public offers. Punters are locked out of two-thirds of IPOs, he says.
But he’s no closer to achieving his goal.
OnMarket is getting good traction among small IPOs and he says they have provided retail access to about a third of all IPOs since they launched in later 2015.
But Mr Bucknell, like Ms Fox, believes the retail end of the market is still being “dudded”.
The ASX was not able to respond to Stockhead queries before publication.
How many of the top IPOs have retail investors missed out on this year?
The top performing IPOs in 2018 so far have been Adriatic Metals, ReadCloud, Star Combo, ClearVue Technologies, Eagle Mountain Mining, Galileo Mining, Keytone Dairy, Paygroup, Elixinol Global, and Pivotal Systems.
Of these, retail investors without a broker connection could have had a piece of Keytone and ReadCloud.
The others either specified that investors had to go through brokers, or did not say at all whether they where offering retail investors anything.
Mr Bucknell says it can be difficult to work out from a prospectus whether it’ll give an retail allocation. By law prospectuses have to include an application, but that is no assurance that there are share there for you.
Among the biggest IPOs — whether they got through or not — you’d have had to know the right broker for Prospa and Viva (ASX:VVR), even though the latter allocated $600 million to retail investors.
Constellation Resources (ASX:CR1) is only inviting “certain members of the public”, according to the prospectus.
Here’s table showing how 83 ASX floats have performed in the past year:
Scroll or swipe to reveal full table. Click on headings to sort
|ASX code||Company||Price change since IPO||Price Jul 24 (intraday)||IPO price||Market cap||Listing date||Raised||Focus|
|CAG||CAPE RANGE||4.75||1.15||0.2||$100.4m||Nov 2017||$5.6m||Fintech|
|TNO||TANDO RESOURCES||2.83720930233||0.165||0.043||$26.6m||Nov 2017||$4.5m||Resources - vanadium, copper, zinc|
|AU8||AUMAKE||2.3125||0.265||0.08||$68.9m||Oct 2017||$6m||China-focused retailer|
|RCL||READCLOUD||1.6||0.52||0.2||$44.0m||Feb 2018||$6m||Tech - education|
|ADT||ADRIATIC METALS||1.25||0.45||0.2||$61.5m||Apr 2018||$10m||Resources - lead, silver, copper, gold|
|5GN||5G NETWORKS||1.2||0.55||0.25||$26.1m||Nov 2017||$4m||Tech - broadband|
|EM2||EAGLE MOUNTAIN||0.9||0.38||0.2||$35.2m||Mar 2018||$8m||Resources - copper|
|MRL||MAYUR RES||0.875||0.75||0.4||$111.8m||Sep 2017||$15.5m||Resources - mineral sands|
|S66||STAR COMBO PHARMA||0.8||0.9||0.5||$72.5m||May 2018||$5.8m||Health - vitamins|
|GAL||GALILEO MINING||0.8||0.36||0.2||$40.9m||May 2018||$15m||Resources - cobalt, nickel|
|KTD||KEYTONE DAIRY||0.7||0.34||0.2||$53.3m||Jul 2018||$15m||Dairy|
|PPE||PEOPLE INFRASTRUCTURE||0.65||1.65||1||$106.0m||Nov 2017||$25m||Workforce management|
|CPV||CLEARVUE TECH||0.6||0.32||0.2||$32.8m||May 2018||$5m||Tech - power-generating glass|
|ROO||ROOTS SUSTAINABLE||0.6||0.32||0.2||$20.5m||Dec 2017||$5m||AgTech|
|CXL||CALIX||0.566037735849||0.83||0.53||$100.6m||Jul 2018||$8m||Water treatment|
|SP3||SPECTUR||0.525||0.305||0.2||$14.7m||Aug 2017||$4.5m||Tech - security cameras|
|EXL||ELIXINOL GLOBAL||0.5||1.5||1||$153.4m||Jan 2018||$20m||Cannabis|
|PYG||PAYGROUP||0.45||0.725||0.5||$37.5m||May 2018||$8.5m||Tech - finance|
|OKR||OKAPI RESOURCES||0.425||0.285||0.2||$9.6m||Sep 2017||$5m||Resources - gold|
|PVS||PIVOTAL SYSTEMS||0.424731182796||2.65||1.86||$293.0m||Jul 2018||$53.5m||Computer chip software|
|CWX||CARAWINE RES||0.4||0.28||0.2||$15.9m||Dec 2018||$7m||Resources - copper, gold|
|RCW||RIGHTCROWD||0.366666666667||0.41||0.3||$54.7m||Sep 2017||$10m||Tech - cyber security|
|IXU||IXUP||0.325||0.265||0.2||$41.2m||Nov 2017||$12.5m||Tech - Collaboration software|
|KRX||KOPPAR RESOURCES||0.325||0.265||0.2||$8.7m||May 2018||$4.5m||Resources - copper, zinc|
|JLG||JOHNS LYNG GROUP||0.25||1.25||1||$276.4m||Oct 2017||$96m||Builder|
|BC8||BLACK CAT||0.25||0.25||0.2||$13.7m||Jan 2018||$6m||Resources - gold|
|ABR||AMERICAN PACIFIC||0.2||0.24||0.2||$41.7m||Jul 2017||$15m||Resources - lithium|
|NTD||NATIONAL TYRE||0.185||1.185||1||$119.7m||Dec 2017||$59m||Auto - tyre and wheel seller|
|DXN||DATA EXCHANGE||0.175||0.235||0.2||$42.8m||Apr 2018||$16m||Tech - cloud computing|
|TAO||TAO COMMODITIES||0.15||0.23||0.2||$5.3m||Apr 2018||$4.75m||Resources - zinc, gold|
|TIN||TNT MINES||0.15||0.23||0.2||$6.4m||Nov 2017||$5.5m||Resources - tungsten|
|PFP||PROPEL FUNERAL||0.12962962963||3.05||2.7||$294.5m||Nov 2017||$131.2m||Funeral services|
|DBF||DUXTON BROADACRE||0.04||1.56||1.5||$67.6m||Feb 2018||$21.1m||Grain industry|
|B2Y||BOUNTY MINING||0.0285714285714||0.36||0.35||$145.5m||Jun 2018||$18m||Resources - coking coal|
|N27||NORTHERN COBALT||0.025||0.205||0.2||$9.4m||Sep 2017||$4.2m||Resources - cobalt|
|PGX||PRIMERO GROUP||0.025||0.41||0.4||$60.5m||Jul 2018||$25m||Engineering|
|BAH||BOJUN AGRICULTURE||0||0.3||0.3||$36.5m||Dec 2017||$7.7m||Beverages|
|RHY||RHYTHM BIOSCIENCES||0||0.2||0.2||$20.2m||Dec 2017||$9m||Health - cancer diagnostics|
|STN||SATURN METALS||0||0.2||0.2||$11.2m||Mar 2018||$7m||Resources - gold|
|VEA||VIVA ENERGY||0||2.5||2.5||$4.9B||Jul 2018||$2.6bn||Energy|
|NES||NELSON RESOURCES||-0.025||0.195||0.2||$9.4m||Dec 2017||$5m||Resources - gold|
|A1C||AIC RESOURCES||-0.05||0.19||0.2||$14.3m||Nov 2017||$10m||Resources - gold|
|JAY||JAYRIDE GROUP||-0.06||0.47||0.5||$35.5m||Jan 2018||$1.5m||Tech - share-ride|
|SIL||SMILES INCLUSIVE||-0.07||0.93||1||$52.4m||Apr 2018||$35m||Health - dental chain|
|CP1||CANNPAL ANIMAL||-0.075||0.185||0.2||$17.2m||Oct 2017||$6m||Cannabis|
|MKG||MAKO GOLD||-0.075||0.185||0.2||$12.0m||Apr 2018||$6m||Resources - gold|
|MMM||MARLEY SPOON||-0.09154929577460001||1.29||1.42||$149m||Jul 2, 2018||$70m||Dinner delivery|
|PKD||PARKD||-0.1||0.18||0.2||$13.5m||Dec 6, 2017||$6m||Construction - car parks|
|PRZ||PARAZERO||-0.125||0.175||0.2||$15.4m||Jun 18, 2018||$5m||Tech - drones|
|P2P||P2P TRANSPORT||-0.136363636364||1.14||1.32||$89.7m||Dec 13, 2017||$29.2m||Fleet mangement|
|IHR||INTELLIHR||-0.15||0.255||0.3||$26.5m||Jan 23, 2018||$4.5m||Tech - HR|
|G1A||GALENA MINING||-0.15||0.17||0.2||$55.5m||Sep 7, 2017||$6m||Resources - base metals|
|SCT||SCOUT SECURITY||-0.15||0.17||0.2||$17.3m||Aug 25, 2017||$5m||Tech - home security|
|WOA||WIDE OPEN AGRICULTURE||-0.15||0.17||0.2||$12.0m||Jul 6, 2018||$5m||AgTech|
|GAS||STATE GAS||-0.175||0.165||0.2||$21.6m||Oct 10, 2017||$5.2m||Resources - gas|
|WND||WINDLAB||-0.1975||1.605||2||$107.9m||Aug 23, 2017||$50m||Energy - wind farmer|
|AS1||ANGEL SEAFOOD||-0.2||0.16||0.2||$20.1m||Feb 21, 2018||$8m||Seafood|
|SIS||SIMBLE SOLUTIONS||-0.2||0.16||0.2||$14.4m||Feb 22, 2018||$7.5m||Tech - Internet of Things|
|BGT||BIO-GENE TECH||-0.25||0.15||0.2||$19.2m||Nov 29, 2017||$7.1m||Health - bug killer|
|BEM||BLACKEARTH||-0.275||0.145||0.2||$8.5m||Jan 2018)||$5.4m||Resources - graphite|
|AX8||ACCELERATE RES||-0.3||0.14||0.2||$6.4m||Feb 14, 2018||$5m||Resources - cobalt gold, copper|
|LRM||LUSTRUM MINERALS||-0.3||0.14||0.2||$5.6m||Nov 15, 2017||$5m||Resources - coal|
|RGL||RIVERSGOLD||-0.3||0.14||0.2||$13.3m||Oct 10, 2017||$6.1m||Resources - gold|
|NC6||NANOLLOSE||-0.325||0.135||0.2||$10.1m||Oct 16, 2017||$5m||Tech - plant-free fibre|
|CRD||CREDIBLE LABS||-0.330578512397||0.81||1.21||$202.6m||Dec 8, 2017||$67m||Online loans|
|OGA||OCEAN GROWN ABALONE||-0.34||0.165||0.25||$28.7m||Nov 14, 2017||$10m||Seafood|
|CG1||CARBONXT GROUP||-0.392857142857||0.425||0.7||$33.1m||Jan 23, 2018||$10m||CleanTech|
|BYH||BRYAH RESOURCES||-0.4||0.12||0.2||$6.8m||Oct 17, 2017||$5m||Resources - copper, gold, manganese|
|CCG||COMMSCHOICE||-0.42||0.145||0.25||$15.8m||Dec 21, 2017||$7.5m||IT services|
|SWF||SELFWEALTH||-0.425||0.115||0.2||$13.6m||Nov 23, 2017||$7.3m||Broker|
|RZI||RAIZ INVEST||-0.438888888889||1.01||1.8||$61.6m||Jun 21, 2018||$15.1m||Microinvesting|
|TIE||TIETTO MINERALS||-0.45||0.11||0.2||$23.9m||Jan 18, 2018||$6m||Resources - gold|
|GO2||GO2 PEOPLE||-0.475||0.105||0.2||$12.4m||Oct 31, 2017||$10m||Tech - HR|
|EN1||ENGAGE:BDR||-0.5||0.1||0.2||$26.4m||Dec 14, 2017||$10m||Marketing|
|NUS||NUSANTARA RESOURES||-0.535714285714||0.195||0.42||$24.6m||Aug 2, 2017||$16.2m||Resources - gold|
|CY5||CYGNUS GOLD||-0.54||0.092||0.2||$6.4m||Jan 15, 2018||$6m||Resources - gold|
|POD||PODIUM MINERALS||-0.625||0.075||0.2||$7.2m||Feb 28, 2018||$5.5m||Resources - Platinum metals|
|SDX||SIENNA CANCER||-0.64||0.072||0.2||$13.0m||Aug 3, 2017||$4.6m||Health - cancer|
|FDX||FRONTIER DIAMOND||-0.67||0.066||0.2||$13.3m||Jan 5, 2018||$4m||Resources - diamond|
|WHK||WHITEHAWK||-0.7||0.06||0.2||$4.4m||Jan 24, 2018||$4.5m||Tech - cyber security|
|CLI||CROPLOGIC||-0.775||0.045||0.2||$5.5m||Sep 12, 2017||$8m||AgTech|
|RD1||REGISTRY DIRECT||-0.92||0.016||0.2||$1.5m||Nov 1, 2017||$2m||Tech - Company registry|