How To Invest In IPO Stocks (Part 1) - What To Read Inside The IPO Prospectus
RAIL and freight operator QR National has made a flat debut on the Australian Securities Exchange.
QR National's opening share price was $2.54 a share, below the initial public offering price of $2.55 a share for institutional investors, but higher than the $2.45 a share price for retail investors.
The former wholly Government-owned rail freight company listed on the ASX at midday (AEDT) today, following Australia's second-largest initial public offering that raised $4.6 billion.
But by 1:05pm (AEDT), QR National stock had hit a high of $2.68 - a 5 per cent premium to its issue price of $2.55.
By early afternoon, the stock was trading at $2.64 in a positive broader market.
The QR National IPO price was at the lower end of the Government's target range of $2.50 to $3.
The Queensland government retains about 40 per cent of the company.
The size of the IPO trailed only Telstra Corporation.
The railway operator, which was valued at $6.7 billion, is now more than 70 per cent owned by Australians, including the Queensland Government's stake.
The State Government retains a 40 per cent stake in the company worth $2.1 billion.
The allocation of QRN’s $4.05 billion in shares is the largest share market listing since Telstra was privatised in three stages between 1997 and 2006.
The State Government declared the float a success on Saturday, despite the price being at the low end of its forecast range of between $2.50 and $3.00 a share.
Queensland Premier Anna Bligh described the float as a historic day for Queensland and her Government's economic reform agenda.
''This transaction will return billions of dollars in proceeds to the budget to pay down debt ...
allowing us to deliver on the schools, roads and hospitals Queenslanders need,'' she said.
''It secures a top 50 Australian company...headquartered in Brisbane.''
Mum and dad investors paid $2.45 for a slice in the company because of a 10-cent discount, and they will be eligible for loyalty bonuses.
The float followed speculation in recent months that QRN shares were too expensive and risky, with brokers at Hunter Green recently valuing it at just $1.93 a share.
Analysts criticised the huge capital costs required to maintain the railway in the years ahead, the high price-to-earnings ratio, low dividend forecast and what some say is overly optimistic growth projections contained in the company’s prospectus.
- With AAP, The Australian
Originally published asQR National climbs above issue price