In a market awash with IPOS the list of debut flops is getting longer, with the latest newcomers Pact Group and GDI Property Group dropping more than 10 per cent on ASX listing today.
The lacklustre debuts this month come after investors started to show signs of IPO fatigue, which could have been partly to blame for the last-minute shelving of high-profile ASX hopeful BIS Industries.
The past week has seen most IPOs underperform the market on debut, albeit amid a decline in the broader benchmark index since a raft of successful book builds last month. The S&P ASX-200 has lost about 190 points so far this month.
Pact closed down 12.6 per cent at $3.32 and real estate investment trust GDI Property Group shed 11.5 per cent to 85.5 cents, against a rise of 0.3 per cent in the overall market.
In defence of Pact’s poor debut, some industry players said investors were loath to commit ahead of Amcor trading ex-Orora tomorrow.
Brambles Ltd's demerged document management business, Recall, and pub real estate play, Hotel Property Investments, have also struggled to gain momentum since listing.
IPOs launched earlier in December were faring better this week despite many failing to inspire on debut. Retailer Dick Smith and Nine Entertainment have held their own against the broader market, as have education and training company Vocation and transport and logistics group McAleese.
Debutantes that have managed to sustain price increases since listing include adult education business Veda, childcare roll-up Affinity Education Group, sports technology firm dorsaVi Ltd, and the Industria REIT.
A further $8 billion in IPOs are expected to come online in the first half of next year. Contenders that may hit the ASX boards before March include Pacific Equity Partners’ Spotless, which has annual revenue of $2.7 billion, and Healthscope Group Ltd as Carlyle Group and TPG consider a $4 billion IPO of the hospital provider.