AFTER A bounce back in the June quarter, IPO activity is set to raise more than $13 billion for the 2005/2006 financial year, a report has found.
According to the latest quarterly IPO Report by Deloitte Corporate Finance, 55 IPOs with raised funds of $2.4 billion occurred during the June quarter, bringing activity in the financial year to 30 June to $13.2 billion, with a total of 170 IPOs.
According to the Deloitte results, this represents a 29 per cent increase in the value of funds raised, compared to the previous financial year.
Utilities have dominated IPO capital raisings in the 2005/2006 year, with four utilities in the top 10. They claimed $4.6 billion of the $9.3 billion in new share issues by the top 10 IPOs.
Deloitte Corporate Finance partner Steve Woosnam said returns from the 10 largest IPOs accounted for 70 per cent of all funds raised during the year. “The largest IPOs averaged a return of minus 6 per cent, a sharp reversal from a 17 per cent gain in the previous year.”
“This reflected a number of factors, including a number of utility floats in the year which tend to be yield rather than growth plays and may also reflect the fact that IPOs this year have been ‘fully priced’ relative to the market,” Woosnam said.