Your Guide to IPOs in Australia: How the Process Works & How to Get a Listing


Initial public offerings (IPOs) can be a highly effective way to raise capital and grow your company in a competitive modern economy. Launching an IPO in Australia is a complex process with many moving parts, but it can be significantly rewarding if executed correctly. Indeed, once your company is listed it has the ability to raise money via one of the most efficient capital raising platforms available.

IPOs are constantly featured in the financial news, with some of the most famous offerings in recent history having achieved remarkable valuations. Famous Australian IPOs have included companies such as Qantas Airways (QAN) JB Hi-Fi (JBH) and Medibank Private (MPL). Well-known international examples have included Meta (formerly Facebook),

But what exactly is an IPO and how do they work? Below, we’ve prepared an easy-to-read guide to IPOs, featuring the steps required to get your IPO off the ground and your company listed on the Australian Securities Exchange (ASX).

What is an IPO?

An IPO is an initial public offering, sometimes known as a float. It is the very first sale of stock issued by a company, and an institutional investor’s exclusive opportunity to purchase shares before they become public on a public securities exchange, such as the Australian Securities Exchange (ASX).

It’s also the process whereby a private company becomes a listed public company. Once a company is listed on the ASX, it then must follow a suite of ASX Listing Rules and the law applicable to public companies in the Corporations Act 2001 (Cth).

Why have an IPO?

There are many reasons why a company would choose to ‘go public’ and offer an IPO.

The central reason (and often, the only reason) is raising money. IPOs are an effective tactic to raise money from the public to grow a company, restructure the balance sheet if a company is in debt or gain extra liquidity. Companies may also want the extra money so they buy another company or facilitate a share sell down for founder shareholders

IPOs are also often a good tactic to recruit competitive talent on the market.

How the IPO process works

The primary steps towards initiating an IPO and listing a company on the stock exchange are discussed below.

Throughout this entire process, it’s critical to hire a highly experienced team of experts to ensure the IPO is a success. This will include an accountant, a lawyer and a lead manager (which will often be a stockbroker and may also act as an underwriter).


There are a number of pre-requisites that companies must ensure they meet before launching an IPO.

The first step is to ensure your company actually can list on the securities exchange pursuant to the ASX Listing Rules. These rules specify the type of business operations and structure your company must have.

Companies are able to hold a discussion with the ASX directly prior to lodging a formal application to make sure they can be quoted on the exchange. They can do this through making an ‘in-principle suitability application’, and the ASX strongly recommend that all companies make one.

Pre-requisites include a minimum market capitalisation, at least 300 non-affiliated shareholders, greater than 20% free float, passing a profits or assets test, having audited historical financial reports and having a company constitution. You can read the complete ASX listing requirements here on the ASX’s website.

You are able to seek an in-principle advice from the ASX prior to listing. This is strongly recommended so that you can address any issues going through the colossal expense and effort to lodge your final listing application. Once this advice is requested, your company should be more or less ready to go to complete the IPO process.

Issuing a prospectus

Before launching an IPO, companies will need to draft and issue a prospectus. Alternatively, companies can also simply issue an information memorandum with the ASX’s consent.

A prospectus will typically include information such as:

  • A company’s business model
  • Information about the industry they operate in
  • Financials
  • Board & Management including their remuneration and financial interest in the company
  • Risks
  • Details of offer

This document will then need to be issued to investors once an offer of new shares is made.

Companies will need to lodge their prospectus with the Australian Securities & Investments Commission (ASIC), which is Australia’s primary corporate watchdog. Your business can then distribute the prospectus once it has been lodged. But it cannot issue any securities (or accept any application for such securities from) until at least 7 days after lodgement (unless ASIC extends this period for up to 14 days).

Drafting a prospectus involves a significant due diligence process, including appointing a Due Diligence Committee (DDC) made up of the appointed lawyers, accountants, lead manager and other experts. You must take particular care that your prospectus is not misleading, that every forecast you state in the prospectus can be properly supported and that your prospectus demonstrates enough evidence to show that you have made ‘reasonable enquiries’ and established a reasonable belief in case you are prosecuted.

Pricing your securities

Showcasing your IPO and the pricing of your securities is a critical stage of the process. The final price to quote your securities is typically decided by a bookrunner – this is generally the same financial services provider who acts as your lead manager. If two or more lead managers are working on the IPO, one or all of them may act as the bookrunner.

There are two types of price-offerings that can be done:

  • Front-end bookbuild

This is where the price is determined before lodging your prospectus with ASIC, and allows you to place the price of your securities in the prospectus itself. This option is selected to reduce the level of pricing risk if the market is fluctuating or otherwise difficult.

This bookbuild will sometimes require the signing of an underwriting agreement. This is signed with an underwriter who agrees to buy your shares that have not been subscribed by investors during the IPO process. This will give your company some peace of mind that it will achieve its capital raising target.

An underwriting agreement is not a mandatory requirement for an IPO listing. In fact, some underwriters won’t sign this agreement at all until “roadshows” (discussed below) have been completed just before your prospectus is lodged with ASIC.

In the Australian market, lead managers will generally only enter into an underwriting agreement once they receive sufficient pre-commitments to cover the entire amount of capital your company is seeking to raise in the IPO. To achieve this, the lead manager would generally have undertaken a roadshow prior to lodgement of the prospectus (which would be a pathfinder prospectus – read more about this below). This is only open to investors who qualify under s.708(8)(11) of the Corporations Act and who can bid for shares without an approved prospectus.

  • Back-end bookbuild

This is where your lead manager will determine the final price of your securities after your prospectus is lodged by ASIC.

Bids will be submitted to your bookrunner by investors during this period, where interested parties indicate the amount of securities they want to subscribe for. They will also inform your lead manager how much money they are willing to pay. When the offer closes, your bookrunner will determine the final price based on the bids received (often called an institutional bookbuild).

The lead managers will then allocate the securities among retail applications and institutional bidders based on the final price determined.

  • Marketing your IPO

You cannot market your IPO to retail investors before lodging your prospectus with ASIC. You should also take care not to make any public statement or advertise your IPO prior to lodging the prospectus.

However, you can engage in certain types of marketing to institutional investors. This includes tactics such as releasing research reports, contacting institutional investors to generate interest and “IPO roadshows” (where your IPO’s lead manager will arrange meetings with institutional investors to assess how much demand there is for your IPO).

Once you’ve lodged your prospectus with ASIC, you can then start marketing your IPO to the general public. This includes retail investors. Advertising over mass media outlets is not usually done, but can be done if an IPO is particularly large.

An impressive 240 companies listed on the ASX in 2021, marking one of the strongest years for IPOs yet. Notable examples included Judo Bank, listing with a $2.3 billion valuation, and PEXA, with a $3 billion valuation. Trading on the ASX

Following your IPO, trading begins. This can occur after your IPO closes (and before settlement) or after your IPO has been settled.

Generally, if you’ve made a general public offer, you will be allowed to trade after settlement, but only 3 business days after holding statements have been issued to IPO investors. Holding statements, known today as CHESS Holding Statements, are usually issued after your securities have been issued to these investors. They are electronic confirmations of changes to an investors’ share holding details, normally issued at the end of every month if there has been a change in an investor’s balance.

Since the introduction of the CHESS system, settlement time for an IPO is normally the second business day after a trade.

Your handy IPO timetable

Below, we’ve put together a simple table to help you navigate the IPO process. A simple IPO can be completed in 4 weeks, although more complex ones a few months.

Screenshot 2022 08 15 105202

Please note that this table is simplified. There are a lot of ‘moving parts’ in the IPO process, emphasising the importance of hiring experts to help you navigate each step of the way.

Hire the right IPO professionals

If you’re looking for a professional to help you navigate the rollercoaster of the IPO process,  and also help you comply with the ASX’s stringent listing rules, get in touch with the ASX financial compliance professionals at 2account. We also work with a team of highly experienced partners who specialise in the IPO process, from auditors, specialist capital raising groups and lawyers.

We can help on two fronts – your accountancy requirements throughout the IPO process,  and ensuring that the ASX listing regulatory requirements are met. Never risk floating your company on the stock exchange without expert guidance, as there are many things that can go wrong.

We’ve had decades of combined experience helping companies facilitate successful IPOs, so please reach out to our team if you’re ready to take your company to the next level. We’d love to chat to see how we can help you.

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