The resurgence of listings in the last two months of 2009 and the initial public offerings (IPO) already in the pipeline for this year shows that companies are once again starting to see value in IPOs, according to HLB Mann Judd.
The IPO market was largely shut down last year but clever businesses are ensuring they’re ready to list once the appetite for IPOs returns, HLB Mann Judd head of corporate finance Geoff Webster said.
“Three large-cap companies came to market in 2009, compared to five in 2008, all in the last four months of the year. In addition, during the last month of 2009, 18 small-cap companies listed, raising an average of $6.31 million each,” he said.
“This strong activity at the close of the year suggests that many small companies that had struggled to secure affordable financing were patiently waiting for the market to show signs of rebounding before undertaking an IPO.
“With a number of smaller floats put off until early 2010 and the expectation of greater numbers of private equity asset sales and government privatisations during 2010, we expect to see a sharp and pronounced turnaround in the IPO market this year.”
Webster said companies looking at an IPO this year would need to be better prepared in order to meet the greater scrutiny of more demanding investors.
Small-cap companies provided the vast majority of activity during 2009 and contributed 29 per cent of new listings to the market, which was a similar proportion to 2008.
