Pepper Money share price faces lukewarm reception following $500m IPO
The non-bank lender’s IPO faced a so-so reception from investors on Tuesday and the stock continued to slide on Wednesday.
To IPO or not IPO?
In anticipation of the initial public offering (IPO), we recently published an article titled Pepper IPO: 10 Things you Must Know Before ASX Listing.
There, we examined the company’s background and looked at its recent operational performance. Here were the highlights:
- Pepper Money is one of Australia’s largest non-bank lenders, focusing on working with under serviced customers, which the likes of the big four may otherwise ignore.
- The company said it was looking to raise $500.1 million in fresh capital from the IPO and issue 173 million new shares as a result.
- The non-bank lender specialises in the provision of home loans, commercial real estate loans, asset finance, as well as broker and loan servicing.
- Between CY18 and CY20 Pepper has seen robust growth across its net interest margin, EBITDA and net profits (NPAT). The company said it expected to see continued growth across these metrics in CY21.
- The company said it was aiming to pay dividends equal to between 30-40% of full-year NPAT
Pepper Money officially listed on the ASX this Tuesday, May 25, to what could only be described as a lukewarm reaction from investors.
Trading commenced at 12:30PM yesterday, and the stock quickly dipped below its offer price of $2.89 per share, closing the session at $2.61 per share.
Things didn’t get much better on Wednesday, though opening higher, by the afternoon session the Pepper Money share price traded at the $2.56 mark, some 11% off the IPO issue price.
The ASX 200 benchmark followed a similar pattern, trading higher by midday but slumping into the close. The index was down some 4 points at the time of writing.
Pepper Money trades under the ticker PPM.
With the IPO now complete, the non-bank lender currently has 439.5 million shares on issue and at its last traded price had an implied market capitalisation of $1,114 million.
The company reiterated that the funds raised under the IPO would be used to pursue growth opportunities while also strengthening its balance sheet.
Here’s what Pepper Money’s CEO, Mario Rehayem, had to say about the now completed IPO. Comments below:
'I would like to welcome our new shareholders to the register. We have been delighted with the support and interest we have received throughout this process from a wide range of institutional and retail investors'
'We will continue to focus on growing our business and to deliver on our purpose of helping people to succeed by concentrating on underserved customer segments via our multi-channel distribution channel and cascading credit model.'
Trade stocks like Pepper Money long and short with IG today
Create an IG account or log in to your existing account to get started now
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Live prices on most popular markets