Step One (ASX:STP) share price surges 86% in 2 days following IPO

This online underwear retailer's IPO was a huge success…

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The Step One Clothing Limited (ASX: STP) share price is charging higher again on Tuesday.

At the time of writing, the online underwear retailer's shares are up 3.5% to $2.85.

This means the Step One share price is now up 86% since listing on the ASX on Monday.

Step One share price surges higher following IPO

On Monday, Step One's shares hit the ASX boards following the completion of an IPO that raised $81.3 million at a price of $1.53 per new share.

This gave the company a market capitalisation of $284 million upon listing. However, with the Step One share price surging higher following its IPO, its market capitalisation has now ballooned to $530 million.

It also means that the company's shares are now trading on a reasonably lofty EV/forecast FY 2022 EBITDA multiple of 30x.

What will the proceeds from the IPO be used for?

Step One raised $81.3 million via its IPO, with $41.3 million of the proceeds going to existing shareholders to allow them to realise part of their investment in the company.

The remaining proceeds will be used to support the company's growth strategies. This includes growing Step One's existing customer base in Australia and the UK and investing in establishing a presence in the enormous US market.

Step One's Founder and CEO, Greg Taylor, believes the IPO will help the company with the next stage of its growth and its vision of becoming an innovative and ethical global brand.

He commented: "I am very excited that today Step One has listed on the ASX. I created Step One to solve the problems of chafing, ride up and managing sweat. In addition to creating an innovative product, it's also made from organic and sustainable materials. I'm looking forward to continuing to build the Step One brand as we expand offshore."

Mr Taylor added: "I am pleased with our year to date sales performance in the lead up to the November Black Friday Cyber Monday sales event. I'm also pleased to confirm our US launch commenced as planned during October. Sales are being fulfilled from a third-party logistics (3PL) provider in the USA and initial results are consistent with our expectations."

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.

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