The latest study into the initial public offering (IPO) market has revealed it experienced its lowest level of activity in two decades during 2024, with only 29 companies listing on the Australian Securities Exchange (ASX).
The HLB Mann Judd “IPO Watch Australia” report for 2024 showed the amount of listing activity dropped by 9 per cent from 2023 when 32 companies floated on the ASX.
“We saw really low levels of activity [in 2024] and I guess the predominant theme behind that has just been the macroeconomic side of things, particularly interest rates, property prices, that had a negative impact on the IPO market,” HLB Mann Judd corporate and audit services partner and co-author of the research Marcus Ohm said.
The contribution to the IPO market from small-cap companies continued to contract over the previous 12 months with only 18 listings from that segment of the market in 2024. To this end, small caps raised $166 million, representing 4 per cent of company listings last year.
Large-cap company activity was more positive over the year with 11 organisations listing in 2024 compared to seven in 2023. In all, the large-cap space accounted for 96 per cent of the capital raised from IPOs, which totalled $4.1 billion last year.
Digico Infrastructure REIT (real estate investment trust), trading under the ASX ticker DGT, was the largest IPO in 2024 and raised $1.995 billion in December, making it the first to pass this capital funding milestone since 2021. The second largest raising of the year was from Cuscal Limited (ASX: CCL) where $336.8 million was generated.
Ohm noted the average stock price gain from listings was fairly consistent overall.
“New listings on average recorded a first-day gain of 12 per cent and coincidentally that was also the year-end average,” he observed.
He pointed out at this stage 2025 looked like being a challenging year for listings, but suggested the situation could be slightly more positive after June.
“We think it’s going to be a difficult start to 2025, but we’re hoping things will improve as we get towards the back end of the year,” he said.
“[In terms of the current IPO pipeline] with listings in their late stages that have a proposed listing date, there are only two or three currently on the ASX so it is a little bit dire at the start of 2025, but we obviously see that improving from what is a low base,” he said.
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