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Global uncertainty and market turbulence in 2016 did little to quell the appetite of investors in Australia’s capital markets, with more than 100 new listings on the Australian Securities Exchange (ASX) and over A$8 billion* in capital raised via IPOs during the year, according to a new report by Herbert Smith Freehills.

The report, From Floating to Surfing: The 2016 Australian IPO Review, reveals that although shock headwinds such as Brexit and the US election resulted in sharp market movements and created challenges for raising capital and pursuing new listings, the impact was short-lived.

Philippa Stone, Herbert Smith Freehills partner and Global Co-Head of Capital Markets explained: “Some listings in late 2016 were deferred to 2017 as a result of the US elections and continued uncertainty around the path to Brexit. However, those IPOs are expected to proceed this year.

“2017 looks to be another positive year for Australia’s capital markets, with a number of high quality IPOs expected to come to market from both corporate and private equity vendors. We hope that a number of IPOs slated for the first half of the year should give confidence to investors and drive continued activity.”

According to the report, there were few listings approaching or exceeding A$1 billion in market capitalisation in 2016 (3% of IPOs), which might also be attributed to market volatility.

The largest ASX listing in 2016 was Reliance Worldwide Corporation, which raised A$919 million for a market capitalisation of A$1.3 billion. Another of the largest IPOs last year was the Ingham’s IPO which raised A$596 million for a market capitalisation of A$1.2 billion.

At the other end of the spectrum, there were a large number of mid-market and smaller IPOs. In fact, 60% of floats in 2016 had a market capitalisation of A$50 million or less, while 15% fell between A$50 million and A$99 million and 25% listed with a market capitalisation of $100 million or more.

Listings in 2016 came from a diverse range of industries and sectors. The clear industry leader in terms of market capitalisation was real estate with Real Estate Investment Trusts (REITs) also raising the highest volume of capital (41% of capital raised for floats with a market cap of over $100 million) followed by software and services and the food and beverage industry.

The software and services sector achieved the highest number of listings with IPOs in that sector representing approximately one in five of all floats during the year. However, the majority of these were for small- mid cap companies. This was followed by the materials, metals and mining sector with the vast majority of these being for small- mid cap exploration companies.

Herbert Smith Freehills is recognised as Australia’s leading law firm for IPOs by value and has acted on more IPOs since 1998 than any other top tier law firm (according to Connect 4). In 2016, the firm was ranked the number one legal adviser for IPO issuers in Australia (Thomson Reuters). Recent examples of the firm’s market-leading work include advising:

  • Reliance Worldwide Corporation Limited on its A$919 million IPO and listing with a market capitalisation of A$1.3 billion;
  • Inghams Group Limited on its A$596 million IPO and listing with a market capitalisation of A$1.2 billion;
  • Propertylink Group on its A$503.5 million IPO of triple-stapled securities and listing with a market capitalisation of A$536 million; and
  • The Australian Government on Medibank Private’s A$5.9 billion IPO.

* Or A$7 billion if ASX Foreign Exempt Listings are excluded.


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