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Australia’s capital markets will be busy throughout 2022 following a bumper year in 2021 — unless of course global economic and strategic issues start to impact on deal enthusiasm. However, issuers should be open to considering pre-IPO raising rounds, ready to move quickly to take advantage of current market conditions (if those are sustained), and alert to the increasingly sophisticated disclosure expectations around Covid-19 impacts and plans to achieve “net zero”, according to a new report from global law firm Herbert Smith Freehills.

Herbert Smith Freehills partner Nicole Pedler explained, “2021 was an exceptional year for capital markets, breaking records for the number of IPOs coming to market, the amount of capital raised and the aggregate market capitalisation of IPO companies. The total capital raised was more than double that of 2020, and almost A$4 billion more than 2018, the next highest year.

“After a challenging 2020, issuers demonstrated confidence and a greater ability to navigate the ongoing uncertainties of the Covid-19 pandemic. The increase in capital raised in 2021 was primarily driven by the higher number of IPOs, suggesting leftover volume from 2020 has played a part in driving some of this success.”

Herbert Smith Freehills partner and Joint Global Head of Capital Markets Philippa Stone said, “Unless deteriorating global economic and strategic conditions overtake us, we expect that the 2022 capital markets will continue to be very busy as a result of a robust IPO market and capital raising driven by record M&A levels. There is a pipeline of issuers preparing to undertake their IPOs following the full slate of second half listings in 2021. Of course, markets can change in an instant and market participants are keenly monitoring the current events in Eastern Europe.”

The firm’s new report — Australian IPO Review 2021: New Heights — covers the key IPO themes, activity and regulatory developments from across the Australian market over the last year, and predicts the trends expected in 2022.

Michael Ziegelaar, Herbert Smith Freehills partner and Co-Head of Australian Equity Capital Markets said, “For IPOs, we suggest that issuers look to beat the last quarter rush and investor fatigue. More than 60% of 2021’s IPOs occurred in the second half of the calendar year and 33% were in the December quarter. In this last quarter of 2021, we saw a number of IPOs withdrawn and / or repriced with investor fatigue impacting market outcomes. There will be a real advantage to IPO candidates if they can avoid the crowded end-of-year rush this year.

“Another significant benefit of avoiding the end-of-year rush will be the ability to work more productively with the ASX listing team. The ability to run a smooth IPO process and meet the timetable is enhanced by managing the listing process with the ASX proactively and with sufficient time for it to be able to perform its role.”

The report also found that after two years of Covid-19 impacts, regulators and investors alike are seeing increased IPO disclosure in this area as the ‘new normal’.

Philip Hart, partner at Herbert Smith Freehills said, “We believe that the trend will continue towards regulators and investors seeking more sophisticated disclosure from IPO candidates about the potential impacts of the ongoing pandemic on the business. While there will always be a level of uncertainty associated with the future, clear communication of the potential financial and operational impacts from the ongoing fallout of Covid-19 and its variants will be expected.

“ASIC has also said that it will focus on prospectus disclosure in relation to climate change impacts, plans to reach “net zero” and other ESG factors in the context of the potential for such disclosures to be misleading or deceptive conduct where there are no reasonable grounds for the promoted outcomes.

“We expect that investors, in particular larger institutional investors and superannuation investors, will also pay close attention to this type of disclosure. Combined with the continued regulatory focus on forward looking statements, the importance of IPO candidates staying alert in this fast-developing area, and providing detailed information about their approaches to these issues, cannot be ignored.”

The Herbert Smith Freehills report also found that, as in 2021, pre-IPO rounds will remain an important part of the capital markets process.

Herbert Smith Freehills partner Tim McEwen explains, “These rounds provide IPO candidates with the opportunity to continue to grow and operate their business before an IPO, and provide investors with an opportunity to develop their relationship with the company — ideally culminating in a successful IPO of a company that is ready to list.”

“We have seen that pre-IPO capital raisings continue to be popular with early-stage, pre-profit tech businesses looking for a longer runway ahead of their ASX listing. With technology and the companies that develop and bring it to market showing no sign of slowing down, we anticipate that the ASX will continue to see large numbers of tech companies listing in the coming years. However, issuers should consider whether they are sufficiently mature to list on the ASX, or whether an additional pre-IPO raise may be best.”

Additional findings of the report:

  • 2021 was a record year for billion-dollar IPOs (even though a number of potential IPOs in this category became trade sales). These included GQG Partners which listed with a market capitalisation of A$5.9 billion, APM which listed with a market capitalisation of A$3.3 billion, Judo Capital which listed with a market capitalisation of A$2.3 billion, and Ventia which listed with a market capitalisation of A$1.45 billion.
  • 2021 saw the comeback of old economy sectors that had more Covid-19-proof business models, including the materials, financial, infrastructure, property and consumer staples sectors.
  • The average IPO in 2021 came to market with approximately 40% of its total outstanding securities in some form of escrow, whether imposed by the ASX or voluntarily restricted by the issuer.
  • Listings in the materials sector comprised the majority of IPOs in 2021, while financial sector listings accounted for the largest share of value raised and market capitalisation on listing.


Herbert Smith Freehills acted on many of 2021’s most significant IPOs and capital markets transactions including advising:

  • GQG Partners Inc. on its A$1.2 billion IPO and listing with a market capitalisation of A$5.9 billion
  • Ventia Services Group Limited on its A$438 million IPO and listing with a market capitalisation of A$1.45 billion
  • The joint lead managers of the A$982.1 million APM Human Services International Limited IPO with a market capitalisation of A$3.3 billion
  • The joint lead managers of the A$657.3 million Judo Capital Holdings Limited IPO with a market capitalisation of A$2.3 billion
  • The joint lead managers of the A$371.6 million Vulcan Energy Resources Limited IPO with a market capitalisation of A$933 million
  • Step One Clothing Limited on its A$81.3 million IPO and listing with a market capitalisation of A$283.6 million
  • The joint lead managers on CSL Limited’s A$6.3 billion placement to institutional investors — the largest primary issuance by an Australian company ever, and the largest equity capital markets deal of any kind in Australia since 2006.

The full report can be found at:

Key contacts

Philippa Stone photo

Philippa Stone

Partner, Sydney

Philippa Stone
Nicole Pedler photo

Nicole Pedler

Partner, Sydney

Nicole Pedler
Michael Ziegelaar photo

Michael Ziegelaar

Partner, Melbourne

Michael Ziegelaar
Philip Hart photo

Philip Hart

Partner, Sydney

Philip Hart
Tim McEwen photo

Tim McEwen

Partner, Melbourne

Tim McEwen

Media contact

For further information on this article please contact

Emily Coultas

External Communications Manager


Australia Melbourne Sydney Brisbane Perth Equity Capital Markets Philippa Stone Nicole Pedler Michael Ziegelaar Philip Hart Tim McEwen