Australia’s IPO market is experiencing a significant downturn, with total proceeds in 2024 reaching just $2 billion, according to recent reports. A single large deal accounted for nearly two-thirds of this total, highlighting the extent of the slump. This represents one of the deepest declines in initial public offerings seen in over a decade on the local bourse.
Jamie Green, executive chair of PrimaryMarkets, described the current situation as a ‘perfect storm’. He noted that companies are increasingly choosing to raise capital privately, avoiding the costs, delays, and scrutiny associated with a public listing. PrimaryMarkets is a platform that facilitates trading in unlisted securities, providing liquidity and price discovery for investors in private companies. Additionally, they offer tools for companies to manage their cap tables and shareholder communications.
Green pointed out that ASX rules, such as the prohibition on dual-class shares, can make the exchange less attractive to founder-led growth firms compared to other major markets. While recent ASX rule changes aim to expedite listings, these reforms primarily benefit larger companies with market capitalisations above $100 million, excluding many early-stage miners and tech start-ups that once relied on the ASX for early growth funding.
Green warns that without substantial reforms that balance governance with flexibility, the ASX risks losing more of Australia’s growth potential to private markets and offshore exchanges. He emphasizes that if the goal is to encourage more listings, the rules must accommodate the companies that are actually seeking to list, otherwise they will look elsewhere for capital.
