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The IPO rush of 2020 is still on
What do American West Metals (ASX: AW1), Black Mountain Energy (ASX: BME), Haranga Resources (HAR), Infinity Mining (ASX: IMI), Panther Metals (ASX: PNT) and Square Inc. (ASX: SQ2) have in common? They’re all companies that were included on the ASX’s Official List today, Wednesday 10 November 2021. As we all know, Square Inc. is the giant US payments company that is listing on ASX because it is acquiring the mighty AfterPay (ASX:APT) for its stock, which up until now had only traded in New York. The other five are doing IPOs. So what’s the best ASX IPO of 2021?
We keep track of who’s on and who’s off ASX’s Official List every day and lately the job has been getting more difficult because of the massive number of IPOs. As of today, on our count, there are exactly 1,900 ASX-listed entities that are not investment companies, suspended securities or specialised securities with names like ‘Challenger Millennium Series 2007-2L Trust’. Of that 1,900, a total of 174, or 9.2%, are new to the boards since the start of 2021. We define ‘new’ as a new company or a different company to what was listed before, but in the same listed entity.
Most new stocks came in through the front door
Not all of the new stories in 2021 have been IPOs going through the ‘front door’. For example, BSP Financial Group (ASX: PFL), the financial services group focused on Papua New Guinea, was a compliance listing where no new capital was being raised. And some of the new stories, such as Dominion Minerals (ASX: DLM), developer of a lime project in the US state of Georgia, have represented old-fashioned ‘back door’ listings.
However as of today, 153 of the ‘ASX Class of 2021’ are IPOs, with two starting their listed life today – Dundas Minerals (ASX: DUN), an explorer focused on the Albany-Fraser Orogen of WA, and Green Technology Metals (ASX: GT1), developer of lithium projects in Canada.
The performance has been amazing
2021 has been a great year for IPO performance. Of the 151 that completed their IPO in 2021 and listed between 1 January and yesterday, 76 stocks are currently higher than their IPO price and the average gain has been 78%. Of the 75 that are lower, the average loss has been only 21%. If you bought every IPO, your average gain for the year is a very respectable 29%.
The Class of 2020 are overachievers
The IPO count in 2021 is up markedly on 2020, when there were about 130 new companies on ASX, of which 76 were IPOs. If you really wanted to look good in 2021, the Class of 2020 was one to look at when the new year of 2021 rolled around. As of yesterday, the 36 IPO winners from 2020 were up a massive 130% on average, while the losers were only down an average 31%. The average gain for 2020 IPOs across both winners and losers has been 46%!
The best IPO’s in 2021
Who have been the best performers of the Class of 2021 and who is the best ASX IPO this year? Kuniko (SX: KNI), a mineral explorer focused on Scandinavia, is up 775% from its 20 cent IPO. Lithium Energy (ASX: LEL), developer of a lithium project in Argentina, has gained 455%. 92 Energy (ASX: 92E), a uranium explorer, is up 275% on its IPO price. Australasian Gold (ASX: A8G), a gold explorer with projects in Queensland and WA, has done 250% since IPO. And Global Lithium Resources (ASX: GL1), developer of the Marble Bar Lithium Project in WA, is now 220% better off than its May IPO price.
From the Class of 2020, the winners have been Ansarada Group (ASX: AND), a provider of virtual document management software, up over 10-fold. Cettire (ASX: CTT), operator of a luxury online fashion emporium, has been a seven-bagger. Aussie Broadband (ASX: ABB), the telecommunications services provider, gained 393%. Playside Studios (ASX: PLY), a video game developer, has done 293%. And Caspin Resources (ASX: CPN), a mineral explorer focused on nickel and copper in WA, is up 275%.
With so much money around, IPO’s are bound to do well
What’s the lesson here? Do your homework and try to get your hands on the IPO’s that look good given the current market sentiment and sector developments. There is so much money sloshing around in Australia that the good IPO’s will do really well.
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