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15 IPOs due to hit the ASX before the end of 2020

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Investors looking to put their faith in newly-listed companies are spoilt for choice, with 15 companies due list on the Australian Securities Exchange by the end of the year and many others hoping to do the same.

Investing in newly minted public companies is a risky endeavor, since the stock has no trading history and limited publically-available information.

"The initial public offering (IPO) process offers an opportunity to invest in companies that haven't yet been efficiently priced by the broader market," says Rob Frost from OC Funds Management.

ipos fourth quarter

"One broker that we know of has a pipeline of up to 18 IPOs to bring to market over the balance of the calendar year," says Frost.

E-commerce has been one of the lead benefactors during COVID-19, as consumers move to the safety of online to do their shopping. Online marketplace MyDeal, which trades furniture and household goods, is hoping to ride this wave with an October 22 listing date and a target raise of $40 million.

"Speaking to any retailer, even bricks and mortar, they'll say there's been a strong shift online," says founder Sean Senvirtne.

"Prior to COVID-19 we were on track to do about $75 million in sales and with COVID we got to $103 million."

Also hoping to ride the e-commerce wave is Booktopia, which according to AFR Street Talk is hoping for a December listing following a false start in 2016 and a failed crowdfunding attempt four months ago. Third time lucky? Time will tell.

Then there's CleanSpace, a respirator manufacturer that has upped its focus on the providing personal protective equipment to healthcare providers combatting coronavirus. The company is hoping to raise $131.4 million.

It is again worth repeating that investing at IPO stage is a risky endeavour, with many companies flat lining or dropping in price once on the market.

Professional investors live and breathe company research, crunching the numbers but also talking to management and visiting factories.

"The opportunity to be heavily engaged early in the IPO process gives OC an opportunity to meet with key management, understand the business model and the growth strategy of the company prior to a more formalised roadshow presentation, where we delve into the financial details."

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David Thornton is a journalist at Money magazine. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.
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