Australia’s IPO market showed tentative signs of life late in 2025 after several years of subdued activity. Early indicators suggest 2026 could mark a meaningful turning point for ASX listings. While conditions remain selective, improving sentiment, regulatory reform and resilient small cap performance point to a healthier pipeline forming beneath the surface.
HLB Mann Judd’s 2026 IPO Watch Australia Report highlights this shift. Despite a muted 2025, where total funds raised fell 22% to $3.2 billion across 35 listings, new floats still delivered strong relative performance. Average deal size dropped to $92 million from $142 million as global uncertainty and plentiful private capital delayed larger transactions. IPOs outperformed the broader market, generating average first day gains of 15% and year end returns of 23%, well ahead of the All Ordinaries.
Small Caps Drive Early Momentum
Small cap IPOs stood out as the most resilient segment of the market. Listing volumes rose 11% compared with 2024, while capital raised increased from $166 million to $204 million. Average deal size edged higher to around $10 million. This suggests investor appetite remains intact for focused growth stories with clear catalysts.
Resources dominated issuance, accounting for 63% of listings and close to $1 billion raised. Real estate and transportation followed, raising approximately $750 million and $685 million respectively. Importantly, debut performance remained strong, with 26 of 35 IPOs trading higher on day one. This reinforces the case for selective participation in new listings.
Sector Trends Shaping the Cycle
Materials led the 2025 IPO landscape, with 22 listings raising roughly $2 billion. Gold, lithium and critical minerals explorers captured attention as commodity prices firmed. Delivering sharp post listing moves on exploration updates and drilling results.
Looking into 2026, technology and defence related IPOs are emerging as potential leaders. ASIC’s fast track listing reforms have improved execution certainty for eligible deals. Further supporting renewed interest in AI infrastructure, data centres and cybersecurity names. Healthcare and industrials remain supported by structural themes including ageing demographics and defence spending. While consumer and discretionary IPOs may re- enter the frame if rate cuts lift confidence later in the year.
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Catalysts Supporting a 2026 Recovery
Several structural tailwinds are now in place. ASIC’s fast track IPO process, trialled since mid 2025, has shortened timelines and reduced deal risk. A meaningful improvement for both issuers and investors. While the early 2026 pipeline remains light, with only a handful of announcements year to date, several larger private businesses have flagged listing intentions for the second half.
Names circulating include AI infrastructure operator Firmus Technologies, Home Furniture Group, radiology provider I MED and veterinary chain Greencross. Near term listings such as Eastern Gas help rebuild momentum, while private equity exits and maturing growth companies could add depth if valuation expectations stabilise.
A Practical Playbook for Small Cap Investors
For active investors and emerging funds, early cycle IPOs tend to favour materials and resource names first, followed by technology once macro conditions ease. Screening discipline matters. Focus on deals raising between $5 million and $15 million, with meaningful institutional participation and clearly defined catalysts within the first three months post listing.
A measured approach works best. Limit IPO exposure to a small portion of the portfolio. Diversify across several names and apply disciplined risk management once stocks move above issue price. While risks remain, including macro volatility and delayed private equity exits, small caps have started to outperform year to date and IPO valuations remain compressed relative to listed growth peers.
Taken together, the data suggest 2026 has the ingredients for an IPO recovery. It is unlikely to be a broad based surge, but for prepared investors, the early phase of the listings cycle often offers the most asymmetric opportunities.