The IPOX® Update 9/1/23
Arm Sets IPO Pricing, Aiming to Raise $5-7 Billion
Arm Holdings, the British semiconductor and software design company, has set its IPO pricing for September 13, with trading to start on September 14. The company aims to raise between $5 billion and $7 billion, which would value the company at $50-70 billion. SoftBank, the current owner, plans to retain more than 90% of Arm. The successful completion of Arm's IPO could trigger a wave of other companies going public. The initial target of $8-10 billion was lowered after SoftBank bought the Vision Fund’s stake in Arm. Arm is currently in talks with major customers for IPO backing, with Goldman Sachs, Barclays, JPMorgan, and Mizuho leading the IPO (Source).
Companies Seek Cornerstone Investors Before US IPOs
Due to a fragile market, companies like Instacart and Arm are courting big-name funds for guaranteed share allocation before their US IPOs. The sluggish market has prompted firms to secure early backing from big investors. US companies have raised $10.3 billion in IPOs this year, surpassing 2022's $8.6 billion. Although cornerstone investments are common in Asia, they are a recent arrival in the US after the SEC eased rules. Rivian Automotive and Nu Holdings previously sold significant shares to cornerstone investors. Baillie Gifford and Franklin Templeton participated as cornerstones in Oddity Tech's $487 million float (Source).
UK Fintech Zilch Discusses IPO With Over 15 Banks
Zilch, a UK fintech company, is discussing its IPO with over 15 banks, although the location is still undecided. CEO Philip Belamant is encouraged by support in London and is considering the LSE and NYSE. Although Zilch is months away from profitability, it was valued at $2 billion in June 2022. The company offers credit for 6-week installments and is diversifying into ad sales and long-term loans. The CEO expects increased UK regulation for Buy Now Pay Later (BNPL) services and advocates for tighter rules. Zilch laid off 10% of its staff last year amid rising interest rates and inflation. Meanwhile, rival Klarna is on course for profitability, while Clearpay and ZIP have exited the European BNPL market (Source).
Chinese EV Maker Hozon Auto Appoints Banks for $1B Hong Kong IPO
Hozon Auto, a Chinese electric vehicle (EV) manufacturer, has appointed CICC and Morgan Stanley to work on its $1 billion Hong Kong IPO, following a 7 billion yuan pre-IPO fundraising. The offering size and timeline have not yet been finalized, and more banks may join the syndicate. Hozon plans to start selling its Neta-branded EVs in Indonesia in Q4 2023. The company exported 6,970 cars in the first half of 2023, selling in Thailand, Myanmar, and Nepal. Hozon has two factories in China with a total capacity of 150,000 units per year and is building its first overseas plant in Thailand, with production to start in January 2024 (Source).
Novo Nordisk Becomes Europe's Most Valuable Company
IPOX® index holding Novo Nordisk, the Danish pharmaceutical company, has become Europe's most valuable company, surpassing luxury group LVMH. Novo Nordisk's market cap hit $421 billion, while LVMH stands at $420.97 billion. This surge was fueled by an investment boost in the weight-loss drug market. Meanwhile, concerns over China's growth have pressurized LVMH and other luxury retailers (Source).
