The IPOX® Update 8/4/23
Weekly IPO Outlook: Three Companies Set to Go Public
Three international companies from varied industries are expected to launch their IPO next week:
Fadu Inc, South Korea's first fabless chip unicorn startup, is expected to raise $147m. The firm, backed by Forest Partners and other new investors like IBK Capital, specializes in Solid State Drive (SSD) storage. The company distinguishes itself by targeting smaller data centers and has witnessed surging interest in its product line amidst the booming demand for system semiconductors. The firm turned profitable in 2022, with sales surpassing 50 billion won. (Source)
Sinar Eka Selaras Tbk PT, an Indonesian company operating branded electronics stores (e.g. DJI, Garmin) and sports apparel stores (e.g. British chain JD), is also preparing for its IPO with an offering size of $27m. The business model leverages the robust market for globally recognized brands in Indonesia, a rapidly developing country with a rising middle class.
Lastly, JRC Co Ltd, otherwise known as "Japan Roller Corporation," is a manufacturer of conveyor belt systems. The company is set to raise $47m through its IPO.
SBB Considers IPO of $3.4 Billion Residential Unit Amid Financial Strain
Swedish property developer, Samhallsbyggnadsbolaget i Norden AB (SBB), is reportedly exploring the possibility of a $3.4 billion IPO for its residential unit. The potential listing, which is currently being evaluated by SEB, could happen as soon as Q4 2023 or H1 2024. SBB, which is grappling with an $8 billion debt and a cash shortfall, plans to retain a significant shareholding post-IPO. However, another plan under consideration involves bringing in institutional investors for a 50% stake. The residential assets under consideration were acquired from Sveafastigheter Bostad Group. While SBB has faced financial strain leading to an S&P Global Ratings cut to CCC+, it believes an IPO or investment could alleviate its current liquidity and leverage issues (Source)
Mainland China's Stock Exchanges Reject New IPO Filings in July
According to recent reports, Mainland China's stock exchanges accepted no new IPO filings in July. This unprecedented occurrence is attributed to heightened listing thresholds and a weakened macroeconomy. Regulatory scrutiny on IPO applications has intensified, particularly against the backdrop of an economic slowdown. Small and unprofitable tech firms are finding it increasingly challenging to list due to the sluggish market and their risk susceptibility. Shanghai's Nasdaq-style Star Market may start rejecting startups not generating revenue, following the trend set by 20 biomedical firms listed this way. As a result, the number of IPO applications reviewed has decreased, with more firms withdrawing applications during the review period (Source)
Middle East IPO Market Stays Active
The IPO scene in the Middle East continues to demonstrate its resilience, with no signs of a summer lull. The Dubai Roads and Transport Authority (RTA) has expressed plans to launch IPOs for its taxi and parking divisions, contributing to the strengthening IPO activity. Furthermore, a Citigroup banker has revealed a surge in IPO requests across the Middle East, indicating a robust pipeline of potential listings. Among the firms seeking IPOs are a shisha brand owner and an edtech company, further diversifying the range of industries represented in the region's public market. The G42 Group, a leading technology company based in the United Arab Emirates, is considering additional IPOs, highlighting the continued growth in the technology sector. The increased IPO activity can be attributed to several factors, including Dubai's ambitious privatisation efforts. These developments have culminated in the Persian Gulf raising a substantial $5.1 billion through IPOs in 2023. As the region continues to make strides in diversifying its economy, the IPO market is poised to remain vibrant and dynamic, according to Citygroup. (Source)
Air Baltic Mulls IPO as Early as September 2024
Air Baltic, the largest airline in the Baltic states, is contemplating an Initial Public Offering (IPO) as early as September 2024, CEO Martin Gauss confirms in an interview with the Latvian press. The potential market value for the airline is pegged at a minimum of €800m. To bolster its fleet and solidify its market position, Air Baltic plans to expand with an additional 30 Airbus planes, thereby increasing the total fleet size to 80. Furthermore, the airline is currently in negotiations to potentially add 20 more planes. As part of its broader strategy, Air Baltic has enlisted the services of JPMorgan and Morgan Stanley for investor meetings focused on refinancing its 2024 bonds. (Source)
