After a lull over the Christmas and the New Year period it looks like the investment bankers have flicked the switch on the initial public offer (IPO) market. Investors who got on-board many of the last year's floats are currently sitting on profits. While it's never a sure thing, it is generally worth taking a look to see what's being offered when an IPO comes to market.
Here's a selection of the companies lining up to IPO.
Genesis Energy Limited (ASX: GNE) is due to list on 17 April with the float expected to raise around $856 million. Genesis is a New Zealand-based diversified energy company, given the long-term prospects and performance of energy-related businesses this float is worth a close look.
On 5 May Pioneer Credit Limited (ASX: PNC) is scheduled to list after raising $45 million. Pioneer is a debt collection agency that specialises in the purchase of debt ledgers. It would appears to be a direct competitor of two already listed debt collection firms – Credit Corp Group Limited (ASX: CCP) and Collection House Limited (ASX: CLH). With the float priced on a price-to-earnings ratio of 16.3x this year's earnings, given the small market capitalisation and vagaries of the industry, the stock appears to be fully priced.
Acorn Capital Investment Fund Limited (ASX: ACQ) is looking to raise $50 million and to list on 30 April. The managers of the fund have an impressive track record of outperforming the market making this an appealing opportunity. Like Contango MicroCap Limited (ASX: CTN), this Acorn listed investment company (LIC) will focus on investing in microcaps too.
Beacon Lighting Group Limited (ASX: BLX) may be the most familiar business to investors out of the upcoming group of IPOs. That's because Beacon operates 71 specialty lighting retail stores with a further 14 franchised stores across Australia. The company is looking to raise around $64 million before listing on 15 April, however given the headwinds many retailers are facing, while the uptick in housing will no-doubt benefit Beacon, investors will need to satisfy themselves of the longer-term outlook for the sector.
Foolish takeaway
A common problem for investors is that IPOs are often tightly held and only select clients of certain brokers get the opportunity to participate. While this is of course far from ideal for outsiders, it can sometimes play to outsiders' advantage. As investors saw with both the high profile Dick Smith Holdings Ltd (ASX: DSH) and Nine Entertainment Co Holdings Ltd (ASX: NEC) floats, investors who picked up shares in the aftermath of the float actually had the opportunity to buy in at below the float price.
