Ventia (ASX:VNT) share price surged 25% following IPO

Here are all the details of Ventia’s float

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The Ventia Services Group (ASX: VNT) share price had a fantastic first day on the ASX on Friday.

Following the company’s initial public offering (IPO), its share price took off to finish the day 23.5% higher than its prospectus‘ offer price.

As of Friday’s close, the Ventia share price is $2.10. However, in intraday trade, Ventia’s stock was swapping hands for $2.14 apiece, representing a gain of 25%.

Let’s take a closer look at Ventia’s IPO and float on the ASX.

Ventia share price off to a flyer

Today saw infrastructure maintenance provider, Ventia Services, hitting the ASX after lowering its offer price significantly.

Initially, Ventia was expecting to ask investors to pay between $2.75 and $3.15 per share. However, when the company’s offer price was finalised, it came to $1.70.

Still, Ventia managed to raise $438 million through its IPO by selling more shares than it originally planned to.  

The company’s owners, Cimic Group Ltd (ASX: CIM) and Apollo Global Management (NYSE: APO), also put $64 million towards the IPO, selling some of their holdings to do so.

Despite selling shares in the company, they’ve each walked away from Ventia’s float with a 32.8% holding in the company.

Ventia finished its first day as a listed company with a market capitalisation of around $1.79 billion. That’s significantly higher than its planned $1.45 billion valuation.

Additionally, Ventia’s first day on the ASX saw more than 31 million of its shares swapping hands. For reference, the company has around 855 million shares outstanding.

Where will Ventia go from here?

Ventia’s prospectus outlined its forecasted results for calendar year 2022.  

Over the course of next year, the company hopes to bring in $4.9 billion of revenue and $405 million of earnings before interest, tax, depreciation, and amortisation (EBITDA).

That represents respective increases of 53.3% and 52.5% on the company’s revenue and EBITDA from calendar year 2020.

Ventia is also aiming to boast a dividend yield of 8.9% for calendar year 2022. Though, the company has estimated that yield based on an assumed $1.70 share price and a 75% payout ratio – neither of which is guaranteed.

Should you invest $1,000 in Ventia right now?

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Motley Fool contributor Brooke Cooper 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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