The IPOX® Update 7/3/23

Global IPO Activity: Australian Chemicals Firm Redox Debuts, More International Listings Lined Up This Week

Today, Redox, an Australian chemicals company, made its trading debut, marking Australia's largest IPO of 2023. Despite the initial 5.10% drop in shares, Redox's entrance is noteworthy amidst Australia's current equity capital market stagnation, with new share sales hitting a 14-year low this year according to Refinitiv data. Market uncertainty could potentially dampen the outlook for other prospective IPO candidates in H2 2023. This week will also see IPOs from Bleach, a Japanese digital marketing and advertising agency, and IMD International Medical Devices, an Italian laboratory equipment distributor. British B2B cross border payments and forex firm, Cab Payments, German hydrogen firm, Thyssenkrupp Nucera, Romanian energy production company, Hidroelectrica, and Indonesian copper and gold mining firm, Amman Mineral Internasional, are all set to go public later this week. (Source)

US IPO Market Sees Revival Led By Growth-Oriented Firms

The US IPO market, which has remained largely dormant since 2021, is showing signs of a revival led by CAVA Group Inc., a Mediterranean fast-casual restaurant chain. Despite the company's unprofitability, CAVA's shares nearly doubled on their first day of trading, reflecting a renewed investor interest in growth-oriented firms. Other successful IPOs like the GEN Restaurant Group Inc., a profitable Korean restaurant chain that raised $43.2 million, add to this positive trend. These movements suggest increased market momentum, with seven IPOs having listed in the last week of June, four of which with offer sizes of over $100 million. There's also the potential IPO of chip designer Arm Ltd, owned by Japan's SoftBank Group Corp., which could become the tech sector's first major entry in almost two years. (Source)

Chinese Economic Slowing Could Influence IPO Activity

Despite a robust first half of 2023 in Chinese IPO activity, the slowing economic growth could impact upcoming listings. Exchanges in Shanghai, Shenzhen, and Beijing have raised $35 billion through IPOs, half of the global total, even with a 14% YoY decline. However, stagnant demand has firms holding back, with revival prospects resting on tech giant spin-offs and AI or automotive startups. The average IPO size in mainland China is down to $183 million from $230 million in H1 2022. Despite this, the anticipated IPO of agriculture company Syngenta, valued at 65 billion yuan ($8.96 million), may bolster China's IPO rankings this year. (Source)

Four Chinese Automotive Startups File for IPOs in Hong Kong

Four Chinese automotive startups have filed for IPOs in Hong Kong in hopes of revitalizing the city's listing volumes. Among these are REPT Battero Energy Co., a battery manufacturer looking to raise up to $1 billion, RoboSense Technology Co., a developer of sensor technology for self-driving vehicles, Black Sesame International Holding Ltd., an AI chips and systems manufacturer for cars, and Autostreets Development Ltd., China's largest used vehicle transaction platform. Despite a slow year for Hong Kong's IPO market, these filings bring renewed hope for a surge in listings. (Source)

Renault Advised to Rethink Ampere EV Unit's IPO Amidst Dilution Risks

Global financial services provider Jefferies has advised French automaker Renault to reconsider its plans regarding the initial public offering (IPO) of its electric vehicle (EV) unit, Ampere. This recommendation stems from concerns about potential risks of share dilution. Jefferies suggests that Renault could contemplate alternative strategies, such as issuing instruments that could be exchanged for shares in Nissan, instead of directly floating Ampere. The automaker has not been able to justify why Nissan should hold a significant stake in the separated Ampere unit. Jefferies proposes that Renault should issue exchangeable instruments, capitalize Ampere, and then distribute shares to its existing shareholders. This approach could avert an upfront dilution ranging from 15 to 30%, while still allowing for capital issuance to partners like Qualcomm. Renault's shares have seen an uptick, rising 2.4% as the company enjoys a fifth consecutive session of gains subsequent to increased full-year earnings estimates. 

Telekom Austria to List Radio Tower Business on Vienna Stock Exchange

Telekom Austria AG, a leading telecommunications firm, has announced its intention to list its radio tower business on the Vienna Stock Exchange in 2023. The company’s CEO, Thomas Arnoldner, and Öbag Chief, Edith Hlawati, have successfully emphasized the value and importance of this IPO. Furthermore, Edith Hlawati is set to be a part of the Supervisory Board, which will be predominantly female. The radio tower business will operate under the name “EuroTeleSites AG,” and an extraordinary general meeting has been scheduled for August 1 to approve the spin-off. This listing is expected to be a significant event in the Austrian capital market and could pave the way for other companies in the telecommunications sector. (Source)

German EV Company Elaris Announces IPO Plans, Targets €500 Million Valuation

Elaris, a German electric vehicle (EV) company, has announced plans to go public with a target valuation of €500 million. The company, which imports and rebrands Chinese-made cars, intends to offer 10% of its shares through the IPO. The listing is scheduled for October and will take place in Munich's M-Access segment, targeting medium-sized firms. Founded in 2020, Elaris has sold just over 600 vehicles and aims to deliver 5,500 units this year. Despite its relatively small scale, boasting a 42-employee team , the company has reportedly been profitable since March 2023. Elaris' founder, Lars Nikolai Stevenson, seeks to target the volume segment of the market with practical vehicles priced between €20,000 and €50,000. (Source)

Swiss Biotech Firm Biolingus Files for a $47M US IPO

Biolingus, a Swiss biotech firm, has filed for a $47 million IPO in the US. The company, which is developing an orally administered GLP-1 obesity drug, plans to offer 3 million shares priced between $15 and $16. At the midpoint of the price range, Biolingus would raise approximately $47 million. The company intends to list its shares on the Nasdaq under the symbol SUBL, with Univest Securities acting as the lead bookrunner. Despite a net loss of $1.4 million in fiscal 2022 and no revenue, the firm is pushing forward with its drug developments. Its lead product is a sublingual version of liraglutide, currently in Phase 1 testing. This foray into the GLP-1 diabetes drug market pits Biolingus against leading players like Novo Nordisk’s Wegovy/Ozempic and Eli Lilly’s Mounjaro. (Source)