Pic: d3sign / Moment via Getty Images
The Full 180: When is a Raise Market not a Raise Market?
News
share
The Full 180 is a fortnightly look at ASX capital raisings.
We are entering our fourth week (or so) of a quiet/consolidation period for capital raisings.
We are chugging along at a pace of four to six share placements per day, with volumes reduced to perhaps 15 capital offerings per week.
This change of tempo is fine and we are noticing investors’ appetite for more conservative companies as evidenced by the well-received Charter Hall Long Wale REIT (ASX: CLW) offer or company-specific growth strategy on display with the MyState Limited (ASX: MYS) capital raise. Finally, the medical technology and biotech sectors continue to attract interest because these companies’ futures are often determined by truly stock-specific events (i.e. FDA approval).
Structurally, we notice investors are supporting their favourite companies and adding to those positions when capital raises become available. Recent examples were the likes of Dacian Gold Limited (ASX: DCN) and uranium explorer Peninsula Energy (ASX: PEN). Both capital raises had significant support from their current shareholder bases.
Share purchase plans are also showing as a featured mechanism for allowing existing investors access to transactions.
In summation, there is no one theme running through capital raises and it has become a Market of Raises as opposed to a Raise Market.
Market thematic of the Week
The past few months have been marked with significant weakness of growth companies and the re-emergence of value stocks. Although major market indices are more or less unchanged, the underlying composition has dramatically changed.
There are, though, some signs of stabilisation. Bitcoin is volatile, but attempting to make a stand. Buy Now Pay Later shares have retraced in many cases ~50% and growth company charts are in the early phases of developing bases. Afterpay is an example of this.
Nobody knows the future but these big factor rotations are worth watching. Otherwise, buyers beware!
Yet, it feels that in the general small cap and placement market, this week has brought about some renewed confidence. There were definitely more placements with much stronger bidding across the board.
Most raises this week closed heavily oversubscribed. High volumes were traded across many sectors on the ASX, and it feels like we are back to a stronger market.
Placements this week
| Company Name | ASX Code | Market Cap | Issue Price | Current Price | % Change from issue price to current price |
|---|---|---|---|---|---|
| MYSTATE LIMITED (XASX:MYS) | MYS | $ 512,692,700 | $ 4.300 | $ 4.850 | 12.79% |
| ENVIROSUITE LIMITED (XASX:EVS) | EVS | $ 105,432,300 | $ 0.085 | $ 0.1075 | 26.47% |
| LATITUDE CONSOLIDATED LIMITED (XASX:LCD) | LCD | $ 58,237,320 | $ 0.068 | $ 0.079 | 16.18% |
| BNK BANKING CORPORATION LIMITED (XASX:BBC) | BBC | $ 75,438,730 | $ 0.700 | $ 0.750 | 7.14% |
| WINCHESTER ENERGY LIMITED (XASX:WEL) | WEL | $ 14,511,940 | $ 0.016 | $ 0.022 | 37.50% |
| NAVARRE MINERALS LIMITED (XASX:NML) | NML | $ 57,355,430 | $ 0.100 | $ 0.110 | 10.00% |
| MEMPHASYS LIMITED (XASX:MEM) | MEM | $ 48,625,530 | $ 0.060 | $ 0.063 | 5.00% |
| DACIAN GOLD LIMITED (XASX:DCN) | DCN | $ 247,466,000 | $ 0.280 | $ 0.277 | -1.07% |
| PENINSULA ENERGY LIMITED (XASX:PEN) | PEN | $ 165,270,100 | $ 0.150 | $ 0.162 | 8.00% |
| VOLT RESOURCES LIMITED (XASX:VRC) | VRC | $ 95,213,120 | Debt Facility | $ 0.037 | - |
| STRIKE RESOURCES LIMITED (XASX:SRK) | SRK | $ 63,019,240 | $ 0.220 | $ 0.235 | 6.82% |
| 3D RESOURCES LIMITED (XASX:DDD) | DDD | $ 18,101,860 | $ 0.005 | $ 0.005 | 0.00% |
| KINGWEST RESOURCES LIMITED (XASX:KWR) | KWR | $ 15,630,080 | - | $ 0.090 | Still in Halt |
| DEVEX RESOURCES LIMITED (XASX:DEV) | DEV | $ 115,888,100 | - | $ 0.365 | Still in Halt |
| PROMINENCE ENERGY NL (XASX:PRM) | PRM | $ 6,653,440 | - | $ 0.011 | Still in Halt |
| CASSIUS MINING LIMITED (XASX:CMD) | CMD | $ 4,595,940 | $ 0.015 | $ 0.019 | 26.67% |
| FIRST GRAPHENE LIMITED (XASX:FGR) | FGR | $ 131,276,700 | $ 0.230 | $ 0.225 | -2.17% |
| ODYSSEY GOLD LTD (XASX:ODY) | ODY | $ 65,616,920 | - | $ 0.135 | Still in Halt |
| CONNECTED IO LIMITED (XASX:CIO) | CIO | $ 3,731,560 | - | $ 0.006 | Still in Halt |
MyState Limited (ASX: MYS): Announced a $80m capital raising. To rapidly accelerate the execution of MyState’s growth strategy, the company undertook a $20m fully underwritten institutional placement and a partially underwritten 1 for 6.6 pro rata accelerated non-renounceable entitlement offer to raise approximately $60 million.
The company’s 2021-2025 strategy has several objectives, which include the acceleration of their home loan and retail deposit growth over the medium term, improving operating leverage (cost to income ratio) in line with business growth, ROE accretion as capital is deployed and to achieve sustainable growth in EPS over the medium term.
Volt Resources Limited (ASX: VRC): In what presents as a very unusual occurrence in the small cap world, Volt utilised a $8.5 million debt facility to fund its recent graphite edition. Just a few months ago, 180 markets raised $3.65 million for Volt at just 1.5c per share. Volt is one of the few companies listed on the ASX as a graphite producer.
Today, Volt Resources is trading at 3.4c.
Peninsula Energy Limited (ASX: PEN): In what was a very popular raise with 180 markets Peninsula raised $13 million through Canaccord Genuity and Shaw and Partners. The uranium sector has been strong recently and Peninsula took advantage of a rising share price to raise funds at 15c per share. This represented only a small 7% discount to the 30-day VWAP. Funds used will include the purchase of 300,000 lbs of physical uranium.
Memphasys Limited (ASX: MEM): Raised $3 million earlier this week. The company’s two largest shareholders Peter Investments Pty Ltd and non-executive director Andrew Goodall contributed $1.65 million and $1.35 million respectively via the issue of Convertible Notes.
Net proceeds will be used to enable to company to complete a verification and validation program for its upgraded Felix device, ahead of the re-commencement of commercial sales discussions in early access markets during the later stages of the quarter ending September 2021. The funding will also enable Memphasys to advance the additional products currently being developed in conjunction with the University of Newcastle.
3D Resources Limited (ASX: DDD): In just one hour, 180 markets were excited to have acted as lead managers raising $1.3 million for 3D Resources. The funds raised will enable 3D to extend the current estimated 200 metre RC drill program at its Challenger Gold project.
The raise was extremely oversubscribed at an issue price of $0.005 per share. Every investor who partook in the raising will also receive one free option for every two shares subscribed listed under ASX: DDD0A.
Thinking about taking the IPO leap?
Pepper Money (ASX: PPM): In a mixed week for IPOs, Pepper Money was the headline act on the ASX. The company raised $450 million at an offer price of $2.89 per new share.
Proceeds will be used to partially repay the Bridge facility, partially repay an existing Shareholder Loan, and strengthen Pepper Money’s balance sheet. However, the listing disappointed holders, opening at $2.61, which was 10% below issue price.
This comes after a number of floats were pulled including Best and Less, Australian Venue Company and Aurora Healthcare. It seems that after the Nuix saga, investors are hesitant, instead seeking to wait for newly listed companies to report their annual results.
Ragnar Metals Limited (ASX: RAG): Raised money at 2c per share with CPS Capital. The share price closed 45% up on listing day at what was a very strong vote of confidence for highly prospective WA gold project. Investors will also receive 1 free attaching option exercisable at $0.04 two years from the date of issue.
Keypath Education (ASX: KED): Is set to list on Wednesday. Keypath is a leading education technology company that partners with universities globally, to deliver career-relevant education to individuals seeking to up-skill or re-skill to prepare them for their work future.
Keypath is currently partnered with 31 universities, conducting 125 programs to over 30,000 students around the world.
Gross proceeds will be used to support Keypath’s growth strategy, which includes increasing enrolments, improving retention in current programs, and expanding market share through broader portfolio of offerings.
Torque Metals (ASX: TOR): Seeking to list on Thursday. Euroz Hartleys led a $5 million raise at $0.20 per new share, where funds will be applied towards the evaluation and exploration of the company’s Paris Gold Project and Bullfinch Project.
Arcadia (ASX: AM7): Raised approximately $6 million at an issue price of $0.20 with CPS Capital, is hoping to list next Friday. The company has four exploration projects in Namibia.
180 Markets’ recent performers
| Company Name | ASX Code | Market Cap | Issue Price | Current Price | % Change from issue price to current price |
|---|---|---|---|---|---|
| VOLT RESOURCES LIMITED (XASX:VRC) | VRC | $ 95,213,120 | 0.015 | 0.037 | 146.67% |
| PEPINNINI MINERALS LIMITED (XASX:PNN) | PNN | $ 12,103,740 | 0.230 | 0.260 | 13.04% |
| MOUNT BURGESS MINING N.L. (XASX:MTB) | MTB | $ 5,941,340 | 0.008 | 0.009 | 12.50% |
| ALLIGATOR ENERGY LTD (XASX:AGE) | AGE | $ 78,022,340 | 0.007 | 0.033 | 371.43% |
| PNX METALS LIMITED (XASX:PNX) | PNX | $ 32,869,740 | 0.006 | 0.009 | 50.00% |
| REDSTONE RESOURCES LIMITED (XASX:RDS) | RDS | $ 11,503,990 | 0.012 | 0.017 | 41.67% |
| KORE POTASH PLC (XLON:KP2) | KP2 | $ 34,642,380 | 0.020 | 0.0165 | -17.50% |
| ECLIPSE METALS LIMITED (XASX:EPM) | EPM | $ 35,199,140 | 0.015 | 0.020 | 33.33% |
180 Markets was established by investors for investors, and has become Australia’s leading deal sharing platform, with a difference. In just 12 months, 180 Markets has established a 1800+ strong investor base that has enjoyed access over 650 placements on the ASX, including more than 30 placements where 180 Markets has been lead manager.
If you are interested in Placements, IPOs and RTOs sign up at www.180markets.com.au.
This article was developed by 180 Markets, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
