2021 KEY THEMES
2022 PREDICTIONS
1
The Australian IPO market had an exceptional year in 2021, breaking records for the number of IPOs coming to market, the amount of capital raised and the aggregate market capitalisation on listing of issuers when compared to each of the last five years.
Unsurprisingly, given the ongoing impacts of the Covid–19 pandemic, ASIC continued to be focused on forward–looking disclosure in prospectuses, engaging with issuers and their advisers to understand how forecasts have been built up, the impact of Covid–19 on the particular business and industry and how changes to the Covid–19 situation may impact the business.
2
The new financial product DDO regime commenced on and from 5 October 2021, including some late changes that were made to the DDO regime on 1 October 2021 to address some unintended consequences of the original drafting. ASX has also continued to provide updated guidance on the ASX Listing Rules.
3
As predicted in our 2020 Australian IPO Review, there was a comeback in old economy sectors that had Covid–19 proofed their business models, including the materials, financial, infrastructure, property and consumer staples sectors.
4
Marketing and pricing of IPO securities, and certainty of outcomes, is a key concern for IPO vendors. Of the IPOs in 2021 with market capitalisations over $100 million, close to 80% were underwritten at the front-end – a significant increase from previous years.
5
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 both the IPO market and capital raising driven by M&A.
1
For IPOs we consider that issuers should be looking at trying to beat the last quarter rush and investor fatigue. We consider that there will be a real advantage to IPO candidates that are able to avoid the end of year rush.
2
The ability to run a smooth IPO process and meet the timetable will be enhanced by managing the listing process with ASX proactively and with sufficient time for ASX to be able to perform its role.
3
As we predicted for 2021, pre–IPO rounds were an important part of the capital markets. We expect that trend to continue.
4
If markets are more settled in 2022, there may be a greater opportunity for back–end pricing on larger IPOs after a full marketing period with a prospectus in the market.
5
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Capital markets will be very busy
Beat the fatigue
ASX will be busy too
The pre–IPO rounds will continue
Cornerstone investors and front–end pricing
We expect that ASIC and investors, particularly larger institutional investors and superannuation investors, will have a real focus on disclosures in relation to climate change, “net zero” emissions and ESG. We expect that IPO candidates will need to provide more detailed information on their approach to these issues.
Disclosure in relation to climate change and ESG
6
After two years of Covid-19 impacts, we expect that investors will want more sophisticated disclosure from IPO candidates about the potential impacts on the business, both positive and negative, that may result from Covid-19.
Covid-19 – the new normal disclosure
7
2021 in review
ASIC’s continued focus on forward–looking disclosure in a time of Covid–19
Other key regulatory updates
Comeback of old economy IPOs
Dominance of front–end bookbuilds
READ 2021 KEY theMES CHAPTER
READ 2022 predictions CHAPTER
READ 2021 KEY theMES CHAPTER
READ 2022 predictions CHAPTER