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Upcoming IPOs this week

Each week I like to look at the upcoming IPOs which are happening on the ASX. It gives me a chance to see if there are any future stars being listed and perhaps get in early on that success story.

Every single share that currently trades on the ASX was a newly-listed share at one point, they should not be avoided just because they are new.

A new float is usually when a private company is looking to sell a small or large portion of the business to new investors. The funds are typically needed for the growth of the business, such as buying property, funding product development or making an acquisition.

According to ASX Ltd (ASX: ASX) there is only one IPO this week. That share is:

Bounty Mining Limited (ASX: B2Y)

Its principal development is coking coal mining and resource development and its underwriter is PAC Partners.

The company is developing the Cook North, Minyango and Wongai coking coal projects in Queensland. Cook, Cook North and Minyango are near Blackwater, whilst Wongai is located near Laura. Bounty has an agreement to acquire the underlying mining leases from Glencore over the next 18 months.

Bounty is looking to expand operations at its Cook Colliery to four underground mining areas and it’s looking to produce around 2.2 Mt each year. Reviews of the locations estimate 459.8 Mt at the Cook Colliery and Cook North Project, 190 Mt at the Minyango Project and 90 Mt at the Wongai Project.

It’s looking to raise $18 million $0.35 per share, then list on 14 June 2018.

Foolish takeaway

Bounty may have success with its projects, however it’s not the type of investment I’d personally want to make. Commodity businesses can be volatile and uncertain, they don’t offer long-term growth like some other shares on the ASX.

Instead, I’d much rather put my money towards these top shares.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of ASX Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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