Only five new floats have hit the ASX this year, with just five more in the current pipeline
\nLitchfield Minerals in the latest addition to the bourse, listing last Friday
\nThe Northern Territory-focused critical minerals explorer raised $5 million for its IPO<\/p>\n
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Those three letters were mentioned a lot \u2013 384 times in fact \u2013 between mid-2020 and the end of last year.<\/p>\n
But, so far in 2024, there have been just five new listings on the ASX.<\/p>\n
That\u2019s a far cry from the smorgasbord of 202 which joined the bourse in 2021 alone.<\/p>\n
There\u2019s no question the market was happy to feast on anything brand spanking new in the wake of the COVID-19 pandemic, but it appears investors have now lost their appetite for the good-old fashioned IPO.<\/p>\n
According to the ASX, there are just five new floats in the pipeline \u2013 and there\u2019s no guarantee they will all become listed entities.<\/p>\n
Having said that, each member of the IPO Class of 2024 to date has been relatively successful.<\/p>\n
With some very high-profile investors in its corner, lithium hunter Kali Metals (ASX:KM1)<\/strong><\/a> is currently up 76% on its opening price back on January 8.<\/p>\n Mick McMullen\u2019s Metals Acquisition (ASX:MAC)<\/strong><\/a> and The Australian Wealth Advisors Group (ASX:WAG)<\/strong><\/a> are both up ~24% on their issue prices.<\/p>\n And while Infini Resources (ASX:I88)<\/strong><\/a> is down 12.5% on its debut, the lithium and uranium explorer did deliver investors an impressive first-day return of 85%.<\/p>\n \u00a0<\/p>\n Litchfield Minerals (ASX:LMS)<\/strong><\/a> hit the ASX last Friday morning following an oversubscribed $5 million IPO which was solely managed by boutique advisory firm Alpine Capital.<\/p>\n The Northern Territory-focused critical minerals explorer\u2019s debut didn\u2019t come with a great deal of fanfare, even though the newcomer executed a near-flawless IPO.<\/p>\n LMS was founded by father-and-son prospectors Michael and Matthew Pustahya<\/a> (the latter is now the company\u2019s managing director) and only lodged its prospectus to become a public company in late January.<\/p>\n Speaking to Stockhead<\/em> shortly after the company\u2019s shares began trading for the first time, LMS chairman Peter Eaglen was impressed with the investor appetite for a new IPO in what remains a challenging market.<\/p>\n \u201cIt\u2019s a tough market, but we only wanted a small raise, just enough to run this first drill programme,\u201d he says.<\/p>\n \u201cA lot of people go out and try and fund everything, but you just can\u2019t do that. So we went very small \u2013 deliberately very small \u2013 just to work up these first lot of targets at Mount Doreen. And if that doesn\u2019t work, we\u2019ve got a big manganese lease to go and explore over at Lucy Creek near the Queensland border.<\/p>\n \u201cWhat we found from this process was investors want something highly prospective, but then they also want to see there\u2019s some sort of future beyond that.\u201d<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n This was Eaglen\u2019s first ever IPO despite a +35-year career in the mining game, headlined by a stint leading assurance activities for Rio Tinto (ASX:RIO)<\/strong><\/a>.<\/p>\n Aside from learning a few new acronyms to add to his resources vocabulary, Eaglen says there were few surprises from a process which others in his position have previously vowed never to repeat.<\/p>\n \u201cThere were a few things I came across which I have to say I was completely ignorant about, but I really enjoyed the learning process of it all,\u201d he says.<\/p>\n \u201cIt\u2019s a process that forces you to stop and think. They don\u2019t put these rules out to stop people getting on the stock exchange, I learnt there\u2019s actually some very good reasons why things are the way they are.\u201d<\/p>\n Often the main challenge small-capped companies face when undertaking an IPO is achieving a minimum spread of 300 non-associated investors.<\/p>\n As Eaglen and the LMS team found, this often means having to scale back lucrative bids from potential retail investors.<\/p>\n \u201cWe had two groups from WA who each wanted to throw $1 million our way, but unfortunately that kills your spread and it becomes \u2018thanks very much guys, but we actually can\u2019t accept\u2019,\u201d Eaglen says.<\/p>\n \u201cThose tactful and sensitive conversations are actually the harder conversations to have rather than meeting the stock exchange rules and all that.<\/p>\n \u201cWe ended up cutting a few of the bigger retail investors back and finished with a spread of about 350 or something like that, which was great. But coming out of my mouth, it probably sounds easier than what it was.\u201d<\/p>\n \u00a0<\/p>\n Despite its best efforts to be drilling as soon as the trademark bell at the ASX was rung, LMS has been forced to wait just that little bit longer to begin its maiden campaign at Mount Doreen \u2013 about 350km north-west of Alice Springs \u2013 due to about 70mm of rainfall in the project area last week.<\/p>\n It appears to only be a minor setback which is largely offset by the fact LMS is taking full advantage of road infrastructure recently put in by the Australian and Northern Territory governments.<\/p>\n \u201cWe\u2019ve got a two-lane bitumen sealed road going right past our lease now, so what was once a seven-hour drive from Alice Springs is now just three,\u201d Eaglen says.<\/p>\n \u201cThe workers who built the road actually had their camp site on our lease before they moved 70km to the north so there\u2019s gen sets and all that ready for us to hook into.<\/p>\n \u201cVery conservatively, we\u2019re saying to the market that come April we\u2019ll easily have the rigs spinning.\u201d<\/p>\n LMS shares closed at 19c following its first day of trading.<\/p>\n \u00a0<\/p>\n \ufeff<\/span><\/span>\u00a0<\/p>\n At Stockhead, we tell it like it is. While Litchfield Minerals is a Stockhead advertiser, they did not sponsor this article.<\/em><\/p>\n <\/span><\/p>\n The post Litchfield proves the market hasn\u2019t completely lost its appetite for IPOs<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Welcome to the bourse<\/strong><\/h2>\n
There\u2019s a first time for everything<\/strong><\/h2>\n
Hitting the ground running\u2026 almost<\/strong><\/h2>\n
IPO Class of 2024 share prices:<\/h2>\n\n