Criterion: Virgin’s trumphant float means more IPOs should be cleared for take-off

Virgin Australia’s successful IPO this week has buoyed other listing candidates, although recent experience shows it helps to be in the right sector.

With Virgin's re-listing up, up and away, other IPO promoters are buckling their seat belts. Pic via Getty

• Several IPOs are scheduled in the wake of Virgin’s successful re-listing – and some have already taken off

• Virgin’s IPO defied investor scepticism about private equity divestments

• Debt-oriented income fund and gold plays have dominated the small number of IPOs in 2025

With Tuesday's Virgin Australia (ASX:VGN) listing maintaining altitude, float promoters have been buoyed by the prospect of getting long-mooted IPOs up, up and away.

Raising $685 million, the Virgin lift-off was admirable given the Middle East unpleasantries that threaten ski-high oil prices. They also disrupted the literal flight plans of Virgin’s 23% equity partner, Qatar Airlines.

And did we mention the IPO was a private equity spin-off? Investors still remember that Myer float – and not for the Jennifer Hawkins cover.

Investors credited Virgin’s owners for pricing the float at metrics that make the airline look cheaper than its more fancied red-tailed rival.

Another theory goes that with several ASX200 plays being taken over, there hasn’t been enough quality equity for domestic-focused fundies generally.

An IPO revival?

So far, the investor zeal looks to be contagious, although it helps to have the right vibe … such as mining for gold.

In the shadow of Virgin’s debut, Greatland Resources (GGP) listed strongly on Tuesday, having raised $490 million.

Backed by Andrew and Nicola Forrest, Greatland owns the WA Telfer gold mine – one of the country’s biggest and once the largest.

NSW based gold and copper explorer Linq Minerals is due to list – takeoff time TBA – having raised $10 million from a conga line of keen institutions.

Infragreen Group (IFN) shares surged 15% on Wednesday’s debut.

The owner of recycling and renewable projects, the infrastructure group raised $40 million.

Credit where credit’s due

Debt-based income funds have also featured in IPOs.

The Latrobe Private Credit Fund (LF1) listed yesterday, having raised $300 million in an oversubscribed offering that further tested investor interest in the burgeoning asset class.

The Dominion Income Trust 1 (DN1) debuted on March 4  and the MA Credit Income Trust (MA1) followed a day later.

The former is not a private credit fund, strictly peaking, as it also invests in government bonds and structured credit (including public and private debt).

With the banks curtailing hybrid debt securities, Wilson Asset Management’s Geoff Wilson sniffed an opportunity for income-starved retirees.

Hence the late April launch of the $165 million WAM Income Maximiser (WMX), which invests in debt and equity with the promise of monthly distributions currently targeting around 6%.

Spicy Mexican trade paved the way

Virgin was the biggest IPO since Mexican food chain Guzman y Gomez (ASX:GYG) listed in June last year, raising $335 million.

This one also faced a sceptical audience, but it proved a spicy ‘taco trade’ of a different kind and the shares remain well above listing price.

Also one of the biggest raisings, payment processing intermediary Cuscal (ASX:CCL) is 22% to the good after listing last November.

Otherwise, smaller IPOs have disappointed.

Of the 29 stocks to debut in 2014, 19 are under water.

Fulcrum Lithium (ASX:FUL) earns the booby prize with an 85% decline.

Rare earths play Axel REE (ASX:AXL) is 60% underwater.

In the pipeline

The chunkiest IPO in the offing is that of Gemlife Communities Group, which develops and operates communities for the over 55s.

The IPO raised more than $750 million, with some of the funds earmarked for the $270 million purchase of the Aliria Group.

Gemlife is due to list next Thursday.

The Step Change Holdings IPO closed yesterday, having raised $14 million.

Step Change provides SAP (resource planning) software to the resources sector.

In an EOFY IPO finale, wound management Tetratherix lists next Monday. The backers aimed for $35 million, but were happy to pocket $25 million.

Riding in the slipstream of Virgin’s success alone won’t ensure IPO success.

Proponents need a solid business model, realistic pricing and a dollop of the ‘wow’ factor.

Given Virgin’s status as an entrenched duopolist, there was always going to be a buzz around the airline’s return to public ownership.

Richard Branson, the airline’s former owner and consummate salesman, would be proud.

Originally published as Criterion: Virgin’s trumphant float means more IPOs should be cleared for take-off