The Australian Securities Investment Commission will begin testing a more streamlined process for local initial public offerings to encourage more companies to list in the country.
The trial, which begins today (June 9), should shave a week off the IPO process — from about 20 weeks now — by having the corporate watchdog review documents earlier, ASIC said in a statement. Only companies that will have a market value of over A$100 million ($83.8 million) will be eligible to participate in the pilot.
Pressure is growing for Australian authorities to loosen IPO rules after a collapse in the number of companies going public in the country, as well as the amounts raised. Still, there are signs of life with Virgin Australia recently announcing a A$685 million relisting that’s poised to be the country’s biggest IPO since late last year.
“Creating a more streamlined IPO process underscores our commitment to ensuring our public markets remain attractive to companies and investors,” ASIC Chairman Joe Longo said in the statement.
The watchdog will also decrease the need for amendments to listings while reducing the impact of market volatility that could affect investor interest in floats, it said.
Though Australia is not alone in facing a shrinking stock market — the London Stock Exchange has lost a quarter of its companies in the past decade — it’s lagging behind others in the region such as Hong Kong, where proceeds from new listings are forecast to double to more than US$22 billion ($28.3 billion) this year.
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After fetching more than US$9 billion in 2021, IPOs in Australia failed to even raise US$1 billion in each of the next two years before rebounding to above US$2 billion in 2024, according to data compiled by Bloomberg. Ahead of Virgin Australia, total proceeds this year have been below US$150 million, according to the data.
