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Business Environment Profiles - Australia

Amount of equity capital raising

Published: 23 May 2024

Key Metrics

Amount of equity capital raising

Total (2024)

47 $ billion

Annualized Growth 2019-24

-12.6 %

Definition of Amount of equity capital raising

This report analyses the value of equity capital raisings on the Australian Stock Exchange (ASX). The data includes both capital raisings for new listings and secondary capital raisings for existing stocks. The data for this report is sourced from the ASX and is measured in billions of current Australian dollars for each financial year.

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Recent Trends – Amount of equity capital raising

IBISWorld forecasts the total value of equity capital raisings to rise by 10.7% to $46.7 billion in 2023-24. This follows a dive in the total value of equity capital raised over the previous year. High inflation and the resulting interest rate hikes are causing instability in the Australian economy, hampering investor confidence. In turn, numerous businesses postponed their plans to go public until the market stabilises. One improvement in capital raising efforts since the 2022-23 lows is the growing interest in certain sectors such as the living sector. Other areas like the property market - specifically in life sciences, industrial & logistics and premium office spaces - have emerged as opportunistic investment sectors amid uncertainty around investment returns.

Secondary capital is the sale of new equity by a company that has already made an initial public offering (IPO). The value of secondary capital raisings has remained relatively high over the past five years, as smaller technology firms, cross-border listings, materials, and mining firms have continued to seek funding to conduct further exploration or expand their operations. IPOs have increasingly been conducted for technology, materials, mining, and investment companies and funds. The value of equity capital raisings has fluctuated significantly over the past five years. It was bolstered by the spin-off of businesses like Coles and Viva Energy from Wesfarmers and Vitol, respectively. Additionally, the listing of Coronado Global Resources, which has been one of the largest coal mining floats since the mining boom, also lifted equity capital raising. On the other hand, economic woes post-pandemic, such as high inflation, interest rate rises, geopolitical conflict, etc., have dragged down equity capital, particularly during 2022-23.

Over the past five years, stints of noteworthy IPO activity have prevented further declines in equity capital raisings. This included the float of Tyro Payments in December 2019, Nuix in December 2020 and Felix in January 2021. Companies specialising in fintech have become increasingly popular as private equity firms' investment vehicles over the past five years. This has been because of their disruptive power across the finance sector. The value of investing in fintech companies increased during the COVID-19 pandemic as operations became more digitalised. Other IPOs with a high valuation include Liberty Financial Group Ltd, a non-bank lender listed at $1.8 billion in December 2020 and Vulcan Steel Ltd, a steel distributing company listed at $930 million in November 2021. Companies that went public in 2021-22 reaped benefits from favourable equity conditions, bolstering their balance sheets amid the COVID-19 pandemic. However, this momentum significantly changed over the subsequent two years. Overall, IBISWorld forecasts the total value of equity capital raisings to fall at a compound annual rate of 12.6% over the five years through 2023-24.

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5-Year Outlook – Amount of equity capital raising

IBISWorld forecasts the total value of equity capital raisings to prop up by 63.4% to $76.3 billi...

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