Li-S Energy (ASX:LIS) IPO booms amid excitement over huge market opportunity

Li-S Energy’s IPO has been very successful…

| More on:
Pilbara Minerals share price ASX lithium shares A stylised clean energy battery flexes its muscles, indicating a strong lift in share price for ASX energy companies

Image source: Getty Images

It has been a stunning first day of trade for the Li-S Energy Limited (ASX: LIS) share price on Tuesday following its IPO.

At one stage today, the battery technology company’s shares were up as high as $3.05.

When the Li-S Energy share price reached that level, it was trading 260% higher than its IPO listing price of 85 cents.

The Li-S Energy IPO

Li-S Energy shares hit the ASX boards this morning after raising $34 million via an oversubscribed IPO. This was supported by retail and well recognised institutional shareholders.

Combined with existing and escrowed shares, this gave the company a market capitalisation of $544 million upon listing. However, with the Li-S Energy share price now fetching $2.31, its market capitalisation has ballooned to approximately $1.5 billion

The company notes that following the IPO and earlier funding rounds, Li-S Energy is exceptionally well capitalised to pursue its commercial and R&D activities. It now has a pro forma cash balance of $52.9 million.

From this, $29 million is earmarked for project expenditure, with working capital of ~$16.5 million to fund potential expansion or acceleration of existing projects, the commencement of new development projects, and the pursuit and engagement in revenue generating opportunities through Original Equipment Manufacturer (OEM) collaboration and other partnerships.

What does the company do?

Li-S Energy has made key technological breakthroughs with potential to make lithium-sulphur (Li-S) batteries commercially viable by extending their cycle life. The company notes that this is creating a genuine alternative to mature lithium-ion (Li-ion) battery technology.

It isn’t hard to see why investors are excited about the technology. With a theoretical maximum energy density more than 5x that of lithium-ion, lithium-sulphur batteries have the potential to substantially extend electric vehicle (EV) ranges and device battery life.

Li-S Energy’s CEO, Dr Lee Finniear, spoke to the Motley Fool and revealed that he was pleased to see investors respond so positively to the company’s IPO today.

He commented: “It’s wonderful to see Australian investors get behind home grown technology. We’ve been delighted with the market’s response to the listing and look forward to the future growth of the company.”

Dr Finniear also notes the company’s significant market opportunity and appears optimistic that EV manufacturers will be taking note of its technology.

“With the massive growth forecast in the EV and battery market, and the demand for higher energy, lighter, safer batteries, we expect strong interest from EV manufacturers and others who are well aware of the limitations of existing lithium ion batteries,” Dr Finniear added.

All in all, the Li-S Energy share price will certainly be one to watch. If the company delivers on its aim to transform the EV battery market, it could have a very bright future ahead of it.

Should you invest $1,000 in Li-S Energy right now?

Before you consider Li-S Energy, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Li-S Energy wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor James Mickleboro 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.

More on Share Gainers