Large cap companies dominated the portion of funds raised for initial public offerings (IPOs) in 2013, a significant shift from the previous year, according to HLB Mann Judd.
Released yesterday, the HLB Mann Judd IPO Watch report found 96 per cent of all funds raised were from companies with a market cap of more than $100 million.
In 2012, 40 per cent of funds raised were from large cap companies.
“That’s quite a dramatic change,” HLB Mann Judd partner and author of the report Marcus Ohm said.
The report found that the total amount raised from new listings in 2013 was more than $8.5 billion, significantly higher than the $2.3 billion average of the past five years.
It is also more than $8 billion up on the historic low of $0.4 billion reached in 2012, according to the report.
In total, the number of companies listed on the Australian Securities Exchange last year was only slightly up, at 49, three more listings than 2012 (46).
“Historically, this is a lot lower than we have experienced,” Mr Ohm said.
“In 2011, we had 104 listings and in 2010 we had 96, so we are seeing roughly half that trend in terms of volume at the moment,” he said.
“Out of those 49, only 30 were small cap companies. That’s quite a reduction on the previous year, which saw small cap companies make up 93 per cent of the total.”
The significant decline in small cap floats is largely due to the declining mining sector, Mr Ohm said, adding that resources companies were 35 per cent of all new listings in 2013, down from 2012, which saw resource companies account for 83 per cent of new listings.
Mr Ohm said this reflects the difficulties in completing smaller raisings under current market sentiment.
“While small cap resource companies have dominated IPO statistics in recent years, this was not the case in 2013,” he said.
“A combination of falling commodity prices and reduced investor sentiment appear to have had a negative impact on resource IPOs during 2013.”
