The IPOX® Update 6/22/24
U.S.
Nasdaq Intensifies Scrutiny of Small Chinese and Hong Kong IPOs
Nasdaq is increasing its scrutiny of small IPOs from China and Hong Kong to prevent wild stock swings. The exchange is now focusing on the identity and independence of pre-IPO investors in these firms. This heightened scrutiny follows extreme price surges and crashes of Chinese micro-cap stocks in 2022. While no IPOs have been halted, the review process now takes weeks longer, adding uncertainty and costs for companies seeking to list. Nasdaq is particularly keen to prove investor independence to prevent potential pump-and-dump schemes. As part of this process, the exchange ensures that a majority of investors in Asia-originated IPOs are U.S.-based. Despite these additional measures, Nasdaq remains attractive for Chinese and Hong Kong firms due to its lower listing thresholds and faster processes compared to the Hong Kong exchange. Recent IPOs on Nasdaq include Jiade Ltd. and Raytech Holding Ltd., both of which have seen stock declines following their listings. This increased scrutiny reflects Nasdaq's efforts to maintain market integrity while still providing opportunities for international companies to access U.S. capital markets. (Source)
Brazilian Fintech PicPay Explores U.S. IPO with Citigroup
Brazilian fintech company PicPay is working with Citigroup to explore a potential U.S. IPO, subject to favorable market conditions. PicPay, owned by the billionaire Batista family's J&F Investimentos SA, had previously filed for a U.S. IPO in April 2021, targeting an $8 billion valuation. However, the company withdrew its registration in June 2021. Founded in 2012 as a digital wallet, PicPay was acquired by J&F Investimentos in 2015. The company has shown significant financial improvement, reporting a net income of 37 million reais ($6.8 million) in 2023, a stark reversal from a loss of 693 million reais in 2022. PicPay achieved its first break-even point in March 2023, demonstrating its growing financial stability. As of December, the company boasted over 35 million active customers, highlighting its strong market presence in Brazil's competitive fintech sector. This renewed IPO exploration comes as PicPay seeks to capitalize on its improved financial performance and expanding user base in the evolving digital payments landscape. (Source)
Europe
Spanish Baker Europastry Launches IPO on Spanish Stock Exchanges
Europastry, a family-owned baker and leader in frozen bread dough, has confirmed plans for an IPO on the Spanish Stock Exchanges. The company aims to raise approximately €225 million ($245 million) through a primary offering to reduce debt and fund growth. A secondary offering will include shares from Exponent, Gallés Office, and Indinura, owned by CEO Jordi Morral. The Gallés family will retain a majority stake post-IPO through Gallés Office. Targeting qualified investors, including institutional placements, the IPO aims for listings in Barcelona, Madrid, Bilbao, and Valencia. Executive chairman Jordi Gallés emphasized the focus on growth financing and maintaining a prudent capital structure. To ensure at least a 25% free float post-transaction, Europastry has granted a 10% over-allotment option. This IPO represents a significant step for Europastry, potentially boosting its market presence and financial capabilities in the competitive bakery industry. (Source)
Italian Luxury Sneaker Brand Golden Goose Withdraws Milan IPO
Italian luxury sneaker brand Golden Goose has withdrawn its €600 million ($653 million) IPO planned for the Milan stock exchange. Despite high initial demand, fundamental investors were reluctant to commit to the offering. The company's controlling shareholder, Permira, faced scrutiny due to previous IPO underperformance. The implied market capitalization for Golden Goose was €1.69-1.86 billion ($1.84-$2.02 billion), which fell below expectations. Financial instability and external factors, including European political events, negatively impacted investor confidence. Syndicate banks' assurances of oversubscription did not translate into robust, long-term interest from investors. The failure of this IPO highlights the ongoing challenges for midcap IPOs in Europe, despite recent positive trends in the market. This development serves as a reminder of the volatility and unpredictability in the luxury goods sector and the broader European IPO landscape. (Source)
Spanish Fashion Retailer Tendam Delays IPO Amid Political Turmoil
Spanish fashion retailer Tendam has decided to delay its IPO until after the summer due to political turmoil. The company, which owns the Women's Secret, Cortefiel, and Springfield apparel store chains, had initially planned to launch the IPO before the end of June. However, Tendam has chosen to wait for more favorable market conditions to ensure the success of its public offering. The IPO is now planned to be launched in Spain before February 2025. This decision follows a trend of IPO postponements in Europe, including the recent delay of Italian luxury sneaker brand Golden Goose's Milan IPO due to market volatility. Tendam's spokesperson declined to comment on the delay. The postponement highlights the challenges facing the European IPO market, as companies navigate political uncertainties and market fluctuations to secure optimal conditions for their public debuts.
CVC Capital Partners Plans Warsaw IPO for Polish Convenience Store Chain Zabka Polska
CVC Capital Partners is planning to list Zabka Polska SA, Poland's largest convenience store chain, in a Warsaw IPO that could value the chain at $7.5-$8 billion. The IPO is expected to raise between $1 billion and $1.5 billion and could launch as soon as September. Goldman Sachs and JPMorgan are leading the preparations for the share sale. If successful, this listing could be the largest in Warsaw since Allegro.eu SA's $2.8 billion IPO in 2020. Zabka, which was acquired by CVC from Mid Europa Partners in 2017, operates over 10,000 franchisee-run branches in Poland. The company has recently expanded into Romania by acquiring a controlling stake in consumer goods distributor DRIM Daniel Distributie. This IPO comes amid a rebound in the European IPO market, which has raised about $14 billion in 2024, signaling renewed investor confidence in the region's retail sector. (Source)
UK's Atom Bank CEO Affirms London as Preferred IPO Destination
Mark Mullen, CEO of Atom Bank, has affirmed that London is the logical place for the bank's future IPO, dismissing speculation about a New York listing. While stating that Atom Bank is not yet ready to go public, Mullen noted positive market signs. The Durham-based bank reported a £27 million operating profit for the year ending March, a significant increase from £4 million the previous year. Valued at £362 million in its latest funding round, Atom Bank postponed its IPO plans in 2022 due to unfavorable market conditions. Mullen emphasized the importance of maturity and confidence before listing to avoid underperformance. Major shareholders, including BBVA and Toscafund, share the view of listing in London. Atom Bank, which employs 500 staff and implemented a four-day work week in 2021, continues to focus on growth and operational efficiency as it prepares for a potential future IPO. (Source)
Berlin Cancels TenneT Germany Acquisition, Dutch Government Considers IPO
The German government has canceled its planned acquisition of TenneT Germany, a major electric grid operator, due to budget constraints. In response, the Dutch government is now considering a private sale or an initial public IPO for TenneT's German arm. Despite this setback, the German government may still pursue a minority stake in TenneT Germany. TenneT continues to move forward with its €171 billion ($171 billion) investment plan for green energy infrastructure. The Dutch finance minister cited Berlin's budget crisis as the reason for the deal's failure. Following the announcement of the collapsed deal, TenneT's bond prices experienced a decline. The Netherlands now faces a €1.6 billion ($1.7 billion) budget shortfall due to the failed sale. This development highlights the complex interplay between national budgets, energy infrastructure, and the pursuit of green energy goals in Europe. (Source)
Asia-Pacific
Chinese Autonomous Driving Startup Momenta Receives CSRC Approval for U.S. IPO
Momenta, a Chinese autonomous driving startup, has received approval from the China Securities Regulatory Commission (CSRC) for a U.S. IPO. The company aims to raise between $200 million and $300 million, with CICC, Goldman Sachs, and UBS serving as underwriters. Founded in 2016, Momenta previously raised $1 billion in a private funding round in 2021. The company boasts an impressive roster of major investors, including SAIC Motor, Toyota, Bosch, Mercedes-Benz, Daimler, and Tencent. Notably, General Motors invested $300 million in Momenta to advance autonomous driving technology for future China models. Momenta collaborates with automakers in China, Germany, and Japan to develop mass-produced self-driving vehicles. The company's technology is currently being used by SAIC Mobility for robotaxi services in China. This IPO represents a significant step for Momenta in the competitive autonomous driving sector and highlights the growing interest in Chinese tech companies in the U.S. market. (Source)
Chinese Ride-Hailing Firm Didi Global Considers Hong Kong IPO for 2025
Chinese ride-hailing firm Didi Global is considering a Hong Kong initial IPO as early as 2025, a move that could potentially revitalize Hong Kong's IPO market. So far this year, IPOs in Hong Kong have raised $1.5 billion, with the market needing a $1 billion deal to regain momentum. Didi's previous New York IPO in 2021 raised $4.4 billion, valuing the company at $73 billion. However, Beijing's strict vetting system has since slowed foreign IPOs, impacting global investor confidence. In the first quarter of 2024, Didi reported a net loss of $193 million, with its current valuation standing at $22 billion. A Hong Kong IPO by Didi could signal Beijing's support for private companies accessing foreign capital. This potential listing is seen as a crucial development for Hong Kong's financial market, potentially attracting more Chinese tech firms to list closer to home and boosting investor confidence in the region. (Source)
Chinese Cloud Computing Firm Qiniu Secures CSRC Approval for Hong Kong IPO
Chinese cloud computing and data service provider Qiniu has won approval from the China Securities Regulatory Commission (CSRC) for its planned Hong Kong IPO. The company, backed by Alibaba and Yunfeng Capital, aims to list in the second half of the year. While Qiniu initially sought to raise $200 million, the final deal size may be smaller. BoCom International and Shenwan Hongyuan are sponsoring the IPO. Qiniu had previously planned a $300 million–$500 million Nasdaq IPO, which was withdrawn in September 2022. The company reported an adjusted net loss of RMB 116 million ($16 million) for 2023. Alibaba holds a 17.7% stake in Qiniu, while Yunfeng Capital, backed by Alibaba founder Jack Ma, owns 12.4%. This IPO represents a significant move for Qiniu in the competitive cloud computing sector and highlights the ongoing trend of Chinese tech companies seeking listings closer to home. (Source)
South Korean Space Startup Innospace Prices KRX IPO at Top Range
South Korean space startup Innospace has successfully priced its Korea Exchange (KRX) IPO at the top of its range, raising 54.3 billion won ($41.6 million). The IPO involved 1.33 million primary shares priced at 43,300 won each after revising the price range. The offering saw strong demand, with 2,159 institutional investors participating and 98% willing to buy at the top price or above. Innospace allocated 71.7% of shares to institutional investors, 25% to retail investors, and 3.3% to an employee stock ownership plan. Founded in 2017, Innospace manufactures rockets and orbital launchers. Despite posting a net loss of 83.2 billion won in 2023, the company's IPO has generated significant interest. Retail investor subscriptions are set for June 20 and 21, led by Mirae Asset Securities. Innospace is aiming for a July Kosdaq IPO with a market capitalization of $294 million. This successful pricing demonstrates the growing investor interest in the space technology sector and highlights South Korea's emerging role in the global space industry. (Source)
Australian Mexican Food Chain Guzman Y Gomez Surges 36% in Largest Australian IPO of 2024
Guzman Y Gomez, an Australian-based Mexican food chain, saw its shares jump 36% in Australia's largest initial public offering IPO this year. The Sydney startup's stock began trading at A$29.90, a 36% premium to its A$22 issue price. The IPO raised A$335.1 million ($224 million) and increased the company's market capitalization to A$3 billion ($2 billion). While Guzman Y Gomez forecasts a net loss for 2024, it predicts a profit in 2025 as part of its aggressive expansion plans. The company aims to match McDonald's store count in Australia within 20 years. This successful IPO signals positive investor sentiment amid challenges of high interest rates and inflation. Guzman Y Gomez currently operates outlets in Japan, Singapore, and the United States, with plans to open 30 new stores per year. The company has been dubbed "Asia's answer to Chipotle." This strong market debut highlights the potential for growth in the fast-casual dining sector and demonstrates investor confidence in Guzman Y Gomez's expansion strategy. (Source)
Disclaimer: News summaries may contain mistakes. The information does not constitute financial advice, endorsement or recommendation and should not be considered as such.
