The Liberty Financial Group (ASX: LFG) share price has jumped up 12% after its shares made their official debut on the ASX today.
The non-bank lender has floated its shares through an initial public offer (IPO) pricing at $6 a share. At the time of writing, the Liberty Financial share price is trading up at $6.71.
More about the Liberty IPO
The company has secured $320.7 million at $6 a share through the IPO, valuing it at a market cap of $1.82 billion.
According to the prospectus pitched to investors during the book build, the group had $11.5 billion loan portfolio as at 30 June, and expects it to increase to $11.9 billion by June next year.
Liberty also forecast $838.2 million in revenue, and $153.9 million net profit in the 2021 financial year. As a comparison, the company made pre-tax profit of $70 million in FY18, and $76.1 million in FY19.
The company was pitched to potential investors as Australia’s “10th biggest lender”, according to the prospectus.
Liberty said it decided to list on the ASX “to position it to pursue further growth opportunities in market segments in which Liberty has scale, as well as growth into emerging markets”.
Quick take on Liberty Financial
Founded in 1997 by Sherman Ma, Liberty was initially a pioneer in the sub-prime mortgage credit market, and was dubbed a “non-conforming” lender in those early years.
Since then, the company has gradually transformed itself into a leading diversified finance company in Australia and New Zealand. Its businesses now include residential and commercial mortgages, motor vehicle finance, personal loans and investments.
Today’s IPO comes after years of failed attempts by founder Ma. The company was mentioned as an IPO candidate as far back as 2004, and again in 2005, 2006, and as recently as 2019.
After the float today, Mr Ma will maintain his 47.5% shareholding, and allows an exit for his co-founders.
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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.
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