We are happy to present our quarterly review of the mid-market IPOs on the ASX.
We are happy to present our quarterly review of the mid-market Initial Public Offerings (“IPOs”) on the Australian Securities Exchange (“ASX”). The focus of the analysis is on the current quarter and the immediately preceding 12 months with the aim of providing you with an overview of the current mid-market IPO activity.
In our analysis, we have looked at IPOs with an enterprise value of less than $200m at the time of listing. We have also provided some further detail on the cost of IPOs broken down by market capitalisation, and the performance of IPOs occurring in the last 12 months by significant sectors
Key highlights are:
- There were 3 mid-market IPOs in the quarter, a decrease on last quarter and on the same quarter last year.
- The mining-related sectors were again the most active sectors in the quarter with 2 IPOs.
- Mid-market companies aggregately raised $15.3 million on the ASX in the quarter.
- The average IPO fundraising was $5.1 million, which is a 76.3% decrease on the previous quarter, and a 60.6% decrease on the 12-month average.
- On average, transaction costs (excluding brokerage fees) increased by 87.4% to $0.37 million when compared to the prior year.
Overview
There were 3 IPOs in the mid-market this quarter, a decrease from 8 last quarter and a fall compared to the same quarter last year (Q3 2023) which had 7.
Total funds raised in the quarter was $15.3 million, a 91.1% decrease from last quarter, and a 79.0% decrease compared to the same quarter last year. The average funds raised per transaction this quarter was down by 76.3% from $21.5 million last quarter to $5.1 million, and a 50.9% decrease compared to the same quarter last year.
This quarter has seen the 12-month average funds raised per transaction decrease by 60.6%.
The average enterprise value at IPO in the quarter was $12.5 million, which was down 79.2% from last quarter and 79.5% from the same quarter last year.
Number of IPOs and funds raised by quarter
Source: S&P Capital IQ and Nexia analysis
Quarterly Activity
During the quarter, 2 IPOs were within mining related sectors and 1 was within the financials sector.
Transaction Costs
Certain costs in undertaking an IPO, being accounting and legal costs, are typically fixed regardless of the outcome. Fundraising costs, on the other hand, are generally paid on successful completion of the IPO and represent a percentage of proceeds raised. Accordingly, fundraising costs have been excluded from our analysis.
Transaction costs by market capital size
A number of factors will impact the costs incurred, including how prepared the company is for the IPO, the complexity of its business and whether there are any related transactions. Average fixed costs per IPO were higher in the last twelve months compared to the previous year, increasing from $199,138 to $373,204.
Methodology
This analysis has been prepared based on data sourced from S&P Capital IQ. Data analysed is for completed IPOs on the ASX, from 1 January 2024 to 31 March 2024, with an implied enterprise value of less than $200m. If no implied enterprise value was disclosed at the IPO filling date, transactions were adjusted to reflect the first enterprise value disclosed within the preceding 90 days.
Of the three transactions analysed for transaction costs there was sufficient data for all of the transactions to calculate the average accounting fees per transaction and there was sufficient data for all of the transactions to calculate the average legal fees per transaction.
