The Rubicon Water (ASX:RWL) share price has doubled since last week’s IPO

The water technology company has made a splash since debuting on the ASX

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A boy is wowed at a surge of water from a blowhole.

The Rubicon Water Ltd (ASX: RWL) share price has been in hot demand this past week.

Since debuting on the exchange last week, shares in the water technology company have almost doubled.

Let’s take a closer look at why investors have been pushing the Rubicon Water share price higher.

Rubicon Water share price makes big splash

Shares in Rubicon debuted on the exchange last week after issuing 42.8 million shares for $1.00 in its initial public offering (IPO).

On its first day of trading, the Rubicon Water share price closed 63% higher for the day at $1.63.

Leading broker Bell Potter was the sole lead manager for Rubicon’s IPO.

According to the Australian Financial Review‘s Street Talk column, three ethical funds got the lion’s share of the company’s IPO. As a result, many retail investors were left scrambling for the remainders.

Yesterday, Rubicon Water shares were swapping hands for $2.05, more than double their initial price.

At the time of writing, shares in the water technology company are trading at around $1.94, down 1.02% for the day.

More on Rubicon Water

Established in 1995, Rubicon specialises in water-saving irrigation automation technology.

The company’s technology provides a range of solutions that help users modernise their irrigation distribution channels and networks.

Rubicon’s technology automates the measurement and control of water flow via solar-powered aluminium gates and soil sensors.

As a result, the company’s system reduces spillage by accurately measuring and accounting for water. Prior to this, irrigation control points had to be turned on or off manually.

The technologies provided by Rubicon are used by various institutions such as governments, irrigation water authorities, and farmers.

According to its prospectus, Rubicon’s technology is implemented in more than 1 million hectares of irrigated land.

The company also notes a pipeline of products and patents across 21 jurisdictions.

What’s next for Rubicon Water?

For 2021, Rubicon has forecasted $80.4 million in revenue for 2021, and $7.5 million net profit, on a pro forma basis.

The company generates more than 85% of its revenue through hardware sales. Rubicon boasts a growing software arm and also generates revenue from maintenance of its products.  

Rubicon’s management cited that the company was pursuing a listing in order to access greater capital to assist its growth strategy.

Capital raised through the IPO will go toward establishing itself in more offshore markets, as well as research and development of new hardware and software products.

Should you invest $1,000 in Rubicon Water right now?

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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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