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 are a few upcoming listings:
1414 Degrees Limited (ASX: 14D)
The company describes its principal activity as commercialising energy storage technology, thermal energy storage system providing a low cost solution to intermittent energy supply and recovering electricity through a turbine on demand.
According to the company, current storage solutions focus on storing and output of electric power, whereas the 1414 Degrees technology delivers an output of heat as well as electric power. Electricity is sourced from renewables or the grid, and is stored as latent heat at constant temperature. The energy is then dispatched on demand.
Apparently, this system is unlike any other energy system in the world. However, it’s still at an early stage of product development and commercialisation.
It is trying to raise $50 million at $0.35 per share and then start trading on 12 September 2018.
Healthia Limited (ASX: HLA)
Its principal activity is as a provider of allied health services in Australia.
Healthia has the aim to be one of Australia’s leading allied health companies. It currently owns and operates the My FootDr Podiatry Clinics, consisting of 56 podiatry clinics and owns an orthotics laboratory (iOrthotics) and 50% of an allied health supplies business (D.B.S. Medical).
It has entered into binding agreements to buy 14 Allsports physiotherapy clinics, 9 other physiotherapy Clinics, 16 podiatry clinics, 7 Extend Rehabilitation branded hand therapy Clinics, the remaining 50% of the issued share capital of My FootDr and a further 25% of D.B.S. Medical, bringing the interest owned by the Company to 75%.
In FY20 onwards it’s targeting dividend payments of between 40% and 60% of NPATA to shareholders.
It is trying to raise $26.8 million at $1 per share and then start trading on 11 September 2018.
Both businesses are interesting investment ideas. Healthia seems like a classic roll-up business that has organic growth potential too. It could be one to watch, however I’ll only be watching it for at least the first six months or so – I want to see how well the new acquisitions are integrated first.
Until Healthia has reported some results I will be focusing on buying these top shares for my portfolio instead.
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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.