Asda IPO
American multinational Walmart has confirmed that its UK subsidiary group, Asda, is seeking an IPO by 2022. We explore Asda’s past performance and the outlook for the business, and delve into what’s known about its initial public offering.
Call 0800 195 3100 or email newaccountenquiries.uk@ig.com to talk about opening a trading account. We’re available from 8am to 6pm (UK time), Monday to Friday.
Contact us: 0800 195 3100
Asda IPO
American multinational Walmart has confirmed that its UK subsidiary group, Asda, is seeking an IPO by 2022. We explore Asda’s past performance and the outlook for the business, and delve into what’s known about its initial public offering.
Call 0800 195 3100 or email newaccountenquiries.uk@ig.com to talk about opening a trading account. We’re available from 8am to 6pm (UK time), Monday to Friday.
Contact us: 0800 195 3100
Why trade Asda's IPO with us?
Speculate on Asda
Leverage your exposure with CFD trading or spread betting
Go long or short
Buy or sell based on your prediction of Asda’s market cap
Buy Asda stock
Invest in Asda with a share dealing account
When is the Asda IPO?
The Asda IPO is not likely to happen before 2022, but no exact date has been set. Head of Walmart’s international division, Judith McKenna, confirmed that the business is not rushing into anything and the listing will take a few years to happen. Asda is seeking to list on the London Stock Exchange (LSE).
How to trade or invest in the Asda IPO
If you want to trade or invest in the Asda IPO, you can choose to do so before or after the listing.
Before the IPO
IG could offer a ‘grey market’ before Asda’s IPO. If we do this, you can speculate on Asda’s share price before the listing happens. With our grey markets, you can:
- Buy (go long) if you think the market cap will be above the predicted price at the end of the first trading day
- Sell (go short) if you think the market cap will be below the predicted price at the end of the first trading day
After the IPO
You can trade or invest in Asda shares after the IPO. You can either:
- Trade spread bets or CFDs to speculate on share price movements
- Use our share dealing service to buy and own the physical shares
Trading vs investing in Asda shares
Trading and investing are different in many ways. When trading Asda shares with us, you’ll use spread bets or CFDs to speculate on the company’s share price movements. These let you take a position without having to own the underlying shares.
You can either go long, if you think that the share price will rise, or go short, if you think that the share price will fall. If your prediction is correct, you’ll make a profit, but if you’re wrong about the market movement, you’ll take a loss.
With us, you’ll trade spread bets and CFDs using leverage, which means that you can take a position based on the full value of the trade while only committing a percentage of the amount – this is called margin. However, both your potential profits or losses will be magnified to the full value of the trade.
Learn more about the impact of leverage on your trading
Leverage isn’t available on investments. When investing in Asda shares with us, you’ll buy and own the physical shares using a share dealing account. Your initial outlay must be the full value of your investment. Because you’ll own the underlying asset, you can only make money if you sell your shares at a higher price, and if the company pays dividends.
As a shareholder, you’ll also have voting rights. If you sell your shares when the price per share is lower than what you paid per share, you’ll make a loss, with your maximum possible loss capped at the full value of your investment (excluding additional fees).
Trade or invest in similar stocks today
If you want to get exposure to other companies in the retail sector right now, you can choose between stocks such as Sainsbury’s, Tesco, Morrisons and Ocado.
Prices above are subject to our website terms and conditions. Prices are indicative only.
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Fast execution on a huge range of markets
Enjoy flexible access to 17,000+ global markets, with reliable execution
Deal seamlessly, wherever you are
Trade on the move with our natively designed, award-winning trading app
Feel secure with a trusted provider
With more than 47 years of experience, we’re proud to offer a truly market-leading service
What will Asda’s IPO value be?
Asda’s IPO value is still to be decided by an investment bank. This will happen when it files for the listing. However, it has been reported that Asda could be valued at between £7 billion and £8 billion. This figure is based on assumed annual earnings of £1.2 billion.
What could the Asda share price be when it floats?
Asda’s share price when it floats will depend on how many shares it will release and what the final IPO valuation is. The exact figure will only be released when the valuation has been decided by an investment bank. After the IPO, the share price will depend on supply and demand. It is not known how many shares Asda will release to the public.
Why is Asda going public?
Judith McKenna (Head of Walmart’s international division) said that Asda is seeking to go public to ‘strengthen the long-term success of the business’. As Walmart is an American corporation, she said that the focus of the listing would be to create a stronger local (UK) business. The IPO would give Asda the opportunity to pursue its own strategy while retaining access to Walmart’s buying power. The listing would also mean a big cash injection for Walmart.
In April 2019, the Competition and Markets Authority (CMA) shut down a merger between Asda and Sainsbury’s, stating that the agreement would result in higher prices and fewer product options for consumers. The IPO announcement was made after a proposed merger failed.
What is the outlook for Asda?
The outlook for Asda is mixed following the collapsed Sainsbury’s deal and given the upcoming challenges surrounding Brexit. Going forward, there will be a strong focus on its strategic priorities, particularly customer value and experience – the latter being a way for the firm to differentiate itself from other discount supermarkets such as Aldi and Lidl. The firm has plans to roll out ‘scan and go’ machines, expand its click-and-collect offering, and even to trial same-day deliveries to improve the customer experience.
How has Asda been performing?
Asda has reported impressive sales growth for eight consecutive quarters (as at September 2019). Its last financial year showed operating profit was up to £803.2 million and net cashflow was up to £1.29 billion.
These results came despite the macroeconomic uncertainty stemming from Brexit. However, CEO Roger Burnley stated that planning for the UK’s departure might prove more difficult than the expected March exit, as logistics networks will have an overflow of Christmas stock.
Asda was the first UK retailer to launch a ‘Black Friday’ sale in 2013, and its market share increased slightly from 2013 (17.1%) to 2014 (17.2%). This was until discount retailers Aldi and Lidl started gaining popularity – and the Asda market share started to dwindle (15.4% in 2019).
Who are Asda’s competitors?
Asda’s competitors include Tesco (market cap of £23 billion), Sainsbury (market cap of £4.7 billion), Morrison (market cap of £4.8 billion), Waitrose (not listed), Co-op (not listed) Lidl (not listed) and Aldi (not listed). Asda is the third largest of the four major UK retail chains in terms of market share.
Asda’s key personnel: who manages the company?
There are six key personnel members on Asda’s management team. Members of the executive board are:
| Roger Burnley | President and chief executive officer |
| Andy Murray | Chief customer officer |
| Rob McWilliam | Chief financial officer |
| Hayley Tatum | Senior vice president: people |
| Anthony Hemmerdinger | Senior vice president: operations |
| Derek Lawlor | Senior vice president: commercial |
What is Asda’s business model?
Asda’s business model is centred around the sale of food, apparel and general merchandise. It also provides both online shopping and delivery services. Asda manages:
- Supercentres – the largest of its stores, offering an extended range of items, often supported by restaurants, banks, hairdressers and dry cleaners
- Superstores – the most common format, offering a large range of items, often supported by a café, healthcare, and other non-food services
- Supermarkets – the smallest of its stores, focusing on food and convenience
- Asda Living – offering a range of home and fashion merchandise
- Petrol filling stations – offering petrol services and a kiosk with food and travel items
How do IPOs work?
IPOs – or initial public offerings – happen when a private company decides to go public. This means that they list on an exchange and start selling shares to the public. Once the company decides how many of its shares it wants to sell, an investment bank will do a valuation of the business to decide how much the shares are worth. This short video has more details on how IPOs work.
What are the risks of trading or investing in an IPO?
All trading and investment activity involves risk. IPOs have these additional risks:
- Missing information, such as no patent protection on intellection property, that make affect the share price
- Limited or non-existent trading history to base decisions on
- Performance that does not match up to market expectations
- The actual company valuation coming in lower than its targeted market cap
To avoid risks associated with any trading and investment activity, it’s vital to have all relevant information. In the case of IPOs, useful documents include company prospectuses and admission documents.
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Choose the UK’s No.1 spread betting and CFD provider1
Why open a trading account with anyone but the best spread betting and CFD provider? With 47 years of experience, we're proud to offer a truly market-leading service.
Choose the UK’s No.1 spread betting and CFD provider1
Why open a trading account with anyone but the best spread betting and CFD provider? With 47 years of experience, we're proud to offer a truly market-leading service.
Choose the UK’s No.1 spread betting and CFD provider1
Why open a trading account with anyone but the best spread betting and CFD provider? With 47 years of experience, we're proud to offer a truly market-leading service.
FAQs
Could I profit from the Asda IPO?
You could profit from the Asda IPO, but you can also lose money. When trading using spread bets and CFDs, you can profit from upward or downward price movements, depending on whether your speculation is correct. If your prediction is incorrect, you make a loss.
If we offer a grey market on Asda’s IPO price, you’ll be able to start trading ahead of the IPO, even though shares will only be available after they have officially listed. When buying the physical shares (investing), you can profit if the share price goes up. However, if the price has gone down from the point at which you bought them, you’ll incur a loss when selling your shares.
What is a grey market?
A grey market enables you to trade before an IPO happens. If IG offers a grey market, we’ll base its price on our prediction of the company’s market capitalisation by the end of its first trading day. All you have to do is decide whether the market cap will go up or down and then ‘buy’ or ‘sell’ accordingly.
Register here if you want to receive updates on the Asda IPO
Who owns Asda?
Asda is owned by Walmart, which bought the company in 1999 for £6.7 billion. Asda has retained its own management team, giving it more autonomy than Walmart’s other subsidiaries. Before the acquisition, Asda was listed on the London Stock Exchange.
How can I stay up to date with the Asda IPO?
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1 Based on revenue (published financial statements, 2022).
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