The Vulcan Steel Limited (ASX: VSL) share price has landed on the ASX boards this afternoon following the successful completion of its initial public offering (IPO).
At the time of writing, the steel manufacturer’s shares are up 1.5% from their listing price to $7.20.
The Vulcan Steel IPO
The Vulcan Steel share price commenced trade at midday after raising $371.6 million at $7.10 per share.
However, unlike other recent IPOs, the funds raised from the offering will not be used to support the company’s growth. Rather, these funds will go to existing shareholders that are selling down their holdings.
The release notes that this provides a liquid market for its shares and an opportunity for other investors to invest in Vulcan Steel. It also notes that listing on the share market provides Vulcan Steel with access to capital markets to enable additional financial flexibility to pursue growth opportunities.
Upon listing, Vulcan had a market capitalisation of $930 million. This has increased to just over $943 million following the rise in the Vulcan Steel share price.
In FY 2021, Vulcan Steel reported revenue of $731.5 million and net profit after tax of $61.1 million. This is expected to rise to $809.3 million and $73.7 million, respectively, in FY 2022. This means the company’s shares are trading at a touch under 13x estimated FY 2022 earnings.
“A momentous occasion”
Vulcan Steel’s CEO, Rhys Jones, said: “This is a momentous occasion and a pivotal step for Vulcan. On behalf of the Company, I would like to welcome all our new shareholders. We received strong support from institutional and individual investors in Australia, New Zealand and further afield. Our employees responded positively to the Priority Offer.”
“We are especially proud that many have decided to participate in the opportunity and that 20% of our employees are now shareholders in the company. We are excited about our prospects. Our team’s focus is unwavering when it comes to enhancing customer satisfaction, growing our business and earnings, and in the process creating more value for our shareholders,” he added.
The post Vulcan Steel (ASX:VSL) share price rises after completing IPO appeared first on The Motley Fool Australia.
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