Investing in IPOs
Companies may choose to raise capital through the issue of new shares or debt. To raise capital, companies can access a large pool of investors and obtain funding for activities including expansion of business operations, acquisitions or to improve balance sheet strength.
If a company is looking to raise equity capital they may consider an Initial Public Offering (IPO). An IPO is undertaken when a company raises capital prior to listing on the Australian Securities Exchange (ASX).
Three ways to invest in IPOs with nabtrade
Broker allocation
Through the broker allocation process clients express their interest for a particular offer. This is followed by a formal application when an offer is opened, however priority is given to clients who expressed interest. Clients who are successful are then given an allocation and can trade the new securities once they list on the ASX.
ASX BookBuild
ASX BookBuild is a tool that gives you access to capital raisings using the existing ASX systems and infrastructure to facilitate client bids. There is no expression of interest process - clients bid directly to the Lead Manager via nabtrade. All allocations are managed by the Lead Manager.
Reinvestment offers
Reinvestment offers, which form part of a Broker allocation, give eligible security holders the option to reinvest. This is a market first in online broking.