(Australian Associated Press)
Mining and exploration companies are tipped to lead the way in a strong suite of initial public offerings in 2017, making up almost half the companies lined up to list on the ASX so far.
Technology stocks dominated the IPO (Initial Public Offer) pipeline in 2016, according to a report by financial consultants HLB Mann Judd, but the materials sector is currently at the forefront for 2017.
Explorers, miners and associated businesses make up 11 of 23 companies seeking admission to the ASX so far.
Materials sector plays are seeking a total of $70 million, up from last year when only four planned listings sought to raise over $15 million.
Investment firm India Fund Limited is the largest planned listing, seeking to raise $50 million – almost a quarter of the $206 million total of current IPOs.
HLB said real estate stocks also feature prominently, with two planned listings looking to raise $30 million in total, while the one technology company on the waiting list seeks $5 million.
That stands in stark contrast to seven planned tech listings pursuing $68.5 million in 2016.
During last year, 94 IPOs debuted on the ASX, up 11 per cent from 2015 and above the five-year average of 72 listings.
The total funds raised increased by seven per cent in 2016 to $7.5 billion, up slightly from the 2015 total of $7.02 billion.
HLB Mann Judd partner and report author Marcus Ohm said an increasing proportion of the market was made up of smaller capitalisation companies in 2016 after 64 entities with a market cap less than $100 million completing their IPOs during the year.
“Whereas large listings had previously dominated the statistics in the period since the IPO market cooled, the activity in both 2016 and 2015 were more balanced in terms of both market capitalisations and industry spread,” he said.
The smallest entrants – those with a market capitalisation below $10 million – had four successful listing in 2016 compared to just one in 2015 and two new listings in 2014.
New listings outperformed the wider market in 2016 with an average increase of 16 per cent in share price across all IPOs and 22 per cent specifically within the small cap sector.