While far from the log-jammed conditions of three years ago, the ASX initial public offer (IPO) pipeline is filling again as a smattering of industrial and resource starters test the market’s quixotic mood.
On the evidence to date, smaller offerings are likely to fare OK if they do make it to the boards – no guarantees there – but vaunted mega offerings such as Virgin Australia will have to wait in the departure lounge.
According to Criterion’s very reliable sources, six companies have listed in 2024 to date, with only two of them underwater.
There’s a reasonable appetite for the ‘speccies’. For instance, last week digital health play Blinklab (ASX:BB1) debuted at a 32 per cent premium and at the time of writing remains around 30 per cent to the good.
The raising brought in $7 million to further Blinklab’s smartphone-based algorithmic tool to detect autism, based on evaluating kids’ facial reflexes.
If that sounds a tad far-fetched, bear in mind that it’s the second time around for backer Brian Leedman.
The Perth biotech entrepreneur was behind Resapp, which developed a ‘cough-in-to-the phone’ respiratory diagnosis algo (Resapp was acquired by big pharma house Pfizer for $180 million in 2022).
Blinklab claims accuracy rates of around 85 per cent, which Leedman says is “remarkably accurate” for a smartphone technology.
It’s also harmless: “The only safety risk is if the user drops the phone on their toe.”
The year’s best IPO performer has been WA lithium explorer Kali Metals (ASX:KM1) which listed at a whopping 150 per cent premium on January 4, despite everyone being at the beach. The shares have held a 64 per cent gain – despite the lithium price being as flat as a Tesla in a blackout.
Litchfield Minerals (ASX:LMS) stock has been 10 per cent underwater since its January 13 debut. Litchfield is going for a jackpot of nickel-cobalt-copper across two Northern Territory tenements.
The lesson? Surfing the critical minerals theme is no longer good enough and the devil is in the detail of pricing and perceived tenement quality.
Among the slim industrial pickings, Australian Wealth Advisory Group (ASX:WAG) deserves kudos for listing at a 40 per cent premium and holding these gains.
With the charter of buying advisory practices in an out-of-favor sector, WAG is steered by a cabal of experienced operators including former infrastructure guru and AFL chairman Mike Fitzpatrick.
Investors Tasmea (ASX:TEA) plans to list on April 29 after raising $59 million at $1.56 apiece.
Specialising in electrical and mechanical maintenance, Tasmea owns 18 businesses and has engorged its revenues via six acquisitions over in the last year.
Exciting? No. Dependable? Yes.
D3 Energy (ASX:D3E) is slated to list on April 26, having launched a $10 million raising.
D3 Energy is exploring for natural helium – which has myriad crucial applications beyond kids’ party balloons. Think of nuclear reactors and missiles – and don’t tell the mums and dads that helium is formed from depleted uranium.
Meanwhile, ASX exemplars Renergen (ASX:RLT), Noble Helium (ASX:NHE) and Blue Star Helium (ASX:BNL) have run out of share price fizz despite the supportive ‘critical element’ thesis. D3 Energy’s South African exploration permits are just down the road from Renergen’s.
While the prospective IPO list is scant, the market looks to be in the happy place of enjoying supportive valuations while avoiding the valuation excesses inevitably that creep back in more bullish times.
Holders in APM Human Services (ASX:APM) will be nodding in agreement. The NDIS clip-the-ticket intermediary debuted in late 2021 at $3.55m after a $980 million raising and despite a takeover offer the shares now fetch around one-third of that.
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