2024 ASX IPOs: Here are 4 important floats to watch out for

Nick Sundich Nick Sundich, April 23, 2024

The class of 2024 ASX IPOs isn’t complete just yet. There are getting ready to graduate to the Big Time next calendar year. Many of them could’ve made it in 2023 but held back as the dour equity market conditions continued.

So far in 2024, the market isn’t back to 2021 levels just yet. Some companies that could’ve been candidates withdrew, like Virgin Australia. But a few have listed and found success, particularly Tasman back in late April. And some may come to market later on the year.

We thought we would pinpoint the Top 4 for investors to watch. For the record, we don’t mean ‘buy’ these companies. We don’t even know if for sure that they are going to list and even when we knew, we would at least like to glance through the prospectuses. After all, you can spot plenty of red flags there. Still, here are 4 ASX companies eyeing off a listing next year.

 

4 2024 ASX IPOs to look out for

 

Chemist Warehouse

We accept this one probably shouldn’t be on the list. It has ultimately decided to join the ASX a reverse listing via Sigma Healthcare (ASX:SIG) rather than a conventional listing.

It would be an appetising company with a strong market position and in a defensive sector. But as companies like Redox (ASX:RDX) show, it is no guarantee of success post-listing.

The deal could even be delayed until next year as the ACCC glosses over the deal. The regulator could deny it, or attach some new strings to the deal that may need to be voted on by shareholders – such as divesting stores or promising to commit to keep existing customers’ terms.

Chemist Warehouse will put the case that even though the group will be big, only a handful of suburbs will see lessening of competition and these could be easily divested.

Watch closely for provisional findings, due out on June 13.

 

Guzman & Gomez

Nearly 20 years since the burrito chain was founded in the Sydney suburb of Newtown, it is looking at listing. It is also looking at expanding even though the economy is soft and margins for fast food providers are being squeezed. The company told the AFR it expects to surpass $1bn in sales in FY24 after reaching $759m in FY23, with demand holding up as consumers seek ‘value’.

Expansion into the US is the key item on the company’s agenda, with the first few outlets opened in Chicago. But it will remain loyal to its roots, expecting to open 30-35 outlets in Australia this financial year.

One concern might be if its 40% shareholder TDM Growth Partners tries to sell out at IPO or after the escrow period. Another is competition in the US market, which is more comprehensive so far as fast Mexican food is concerned. And finally, what valuation will it be put at? The most recent pre-IPO valuation put it at 32x EV/EBITDA for FY24 – not cheap at all. Granted, it is the franchise itself, not just a master franchisor like Dominos (ASX:DMP) and Collins Foods (ASX:CKF) are. Only time will tell what happens.

 

Noja Power

Noja Power is a Queensland-based company that makes electrical equipment. It doesn’t sound like a sexy industry, but it is an important space and one can be lucrative for companies and their shareholders. Just look at the runaway success of IPD Group (ASX:IPG) since it listed in late 2021.

The company pulled off a $60m pre-IPO fundraising round in April that valued it at just under $500m, and is reportedly set to list some time in the second half of 2024. It has over 99,000 automatic circuit reclosers installed in 106 countries.

 

Mason Stevens

Mason Stevens is a wealth management technology and services provider, offering exposure to several investing asset classes. In our view, this could well be one of the best IPOs of 2024 so far as prospects are concerned. Stocks in the wealth management technology sector have a good track record, including Netwealth (ASX:NWL) and Hub24 (ASX:HUB).

It has raised money from pre-IPO investors and made record revenues of $43.1m in FY23, up 16% from the year before. But as it the case with all of them, it is waiting for the conditions to be right for it to list.

 

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