The Dalrymple Bay Infrastructure Limited (ASX: DBI) share price has taken a beating on the first day of its ASX listing, losing more than 15% soon after the shares floated.
In today’s initial public offer (IPO), Dalrymple has raised $656 million by selling 255 million shares at a price of $2.57 per share.
The Dalrymple share price was trading at $2.16 at close of trade.
More about the Dalrymple IPO
Dalrymple owns the Dalrymple Bay Coal Terminal, which handles about one-third of Queensland’s coal exports, and 15% of global export metallurgical coal volumes in 2019.
The port sits on the world’s largest coal export terminal, Port of Hay Point, which handles coal from the Bowen Basin mines. The Bowen Basin mines are the source of 80% of Queensland’s coal.
During the book build, Brookfield – which privately owned 100% of Dalrymple before IPO – had a hard time convincing institutional investors. Their concerns included the pricing of the float and its ability to expand if coal demand from China falters. Investors were also worried about the declining demand for coals in general as the world moves towards renewable energy.
Brookfield addressed investor concerns in the prospectus, saying that 80% of the coal going through the Dalrymple Bay terminal each year was metallurgical coal, also known as coking coal used in steel making. This type of coal is still generally accepted by investors who are divesting from thermal coal in favour of renewables amid climate concerns.
Retail investors eventually took up one-third of the share allocation, lured by the promise of a 7% dividend yield next year.
Brookfield retains a 49% stake, with Pershing Securities Australia – which was convicted of criminal offences in August for breaching laws relating to client money – taking 32 million shares of the allocation or 6.4% of the company. The Queensland Government meanwhile is the other major shareholder, investing $128 million from its Backing Queensland fund to take a 9.99% stake.
The IPO valued Dalrymple at $1.286 billion on a market capitalisation basis, and $3.074 billion in terms of enterprise value.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
More reading
- Why the Infratil (ASX:IFT) share price rocketed 21% higher today
- Is the Coles (ASX:COL) share price a buy for 2021?
- Why the Andromeda Metals (ASX:ADN) share price is lifting off today
- ASX stock of the day: Linius (ASX:LNU) share price blasts up 30% on product debut
- Leading brokers name 3 ASX shares to sell today
Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post Dalrymple (ASX:DBI) share price tanks 15% at IPO debut today appeared first on The Motley Fool Australia.
from The Motley Fool Australia https://ift.tt/39LTsAG
Leave a Reply