OzForex shares rise sharply on debut
OzForex's founder and a key backer are each set to reap a $60 million windfall after the sharemarket debut of the online currency exchange company.
OzForex opened 30 per cent higher than its $2 initial public offering price at $2.59 on its first day of trade. The stock finished the day up 28 per cent at $2.56, taking its market capitalisation to $664.4 million.
"It's [a] nice outcome for the people who have invested in us and I'm pleased for the shareholders," OzForex chief executive Neil Helm said. "But ultimately what I'm trying to do here is ensure that the value proposition that we offer our customers stays the same and we continue to do what we're doing."
The debut of OzForex was closely watched as a barometer to demand for IPOs. So far this financial year, 23 companies have listed on the ASX, however, most of these have been small to mid-size stocks. Looming at the end of this year is the $3 billion float of Nine Entertainment while mortgage insurer Genworth is expected to list its Australian arm next year.
OzForex founder Matthew Gilmour and early investor Gary Lord will each receive about $60 million from the sale. Macquarie is set to receive just more than $90 million from the sale.
The IPO, which raised $439.4 million by the issue of 12 million new shares and the sale and transfer of 207.7 million existing shares, was heavily subscribed by institutional investors. OzForex's owners retained 20.3 million shares, or 8.5 per cent.
Mr Helm said OzForex's focus in the next 12 months was to strengthen its business in Australia as well as in Hong Kong, Singapore and the US.
For the last financial year, OzForex posted a net profit of $13.1 million. The company's prospectus forecast a stronger year in financial 2014, with profits expected to rise to $18.6 million, excluding costs of listing.
At the IPO price of $2 and expected earnings per share of 7.8¢, OzForex was sold at a forward price-to-earnings ratio of 25.6.
"The stock is very tightly held," RBS Morgans senior trader Luke McElwaine said.