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Even DigiCo (ASX:DGT) and its $2.74 billion float – dubbed the “biggest IPO of the year” in the build-up to it ringing the bell today – hasn’t been able to shake Australian investors’ recent indifference to newly-listed companies.
There was some early interest, with DigiCo finding an intraday peak of $5.10 but a quick reversal dragged it back down past its $5 IPO price to around $4.87 a share.
Some of the company’s 2.6% dip on opening day was due to the local bourse dragging lower through a red Friday; only Financials and Discretionary stayed up.
Mostly though, it seemed even the $4 billion HMC Capital-backed data centre landlord couldn’t excite Aussie punters who also shrugged over interesting offerings like Cuscal (ASX:CCL), Symal Group (ASX:SYL), and Whitefield Income (ASX:WHI). The latter opened early yesterday and is selling just 0.39% higher.
Like most other floats since Guzman Y Gomez (ASX:GYG) exploded in June, DigiCo found itself inching by mere cents; by 3:19pm today, it was at $4.93 a share.
The landscape for ASX debutants has been so bad that Whitefield’s Thursday arrival was basically described as “quite brave” by financial analysts.
There had been some that thought DigiCo was too big to follow the same dour trend – especially HMC Capital dealmaker David Di Pilla, who said the early investing opportunities around the infrastructure REIT were simply “huge, especially in the United States, which is a market 20 times bigger than Australia.”
“As the power demand keeps going up, and as the processing capacity keeps going up, the demand for these data centre assets keeps moving up the whole time,” Di Pilla billed. “To be a natural owner of these assets, to bring that to the market here at a moment in time, I think is why we got such a strong reaction to this IPO.”
“This entity has been set up to be able to invest right through the value chain. We think that is a very unique operating model not many groups are pursuing.”
On paper it made sense to back DigiCo to buck the trend too, considering the now-listed company – now trading under DGT from today – came in boasting 13 data centres, a capacity of 44 megawatts, and nearly 570 locked-in customers.
Another strong selling point was its U.S. spearhead, with a weighty $1B development pipeline solidified after DigiCo scooped up infrastructure platform StratCap.
So too the acquisition of the Global Switch Australian data centres for $1.9B.
Not everyone was so sold though; Morningstar tipped DigiCo’s value as $3.40 a share.
It certainly hasn’t dropped that far – and casting an eye over the data centre landlord’s fundamentals, this finance journalist would be shocked if it did – but the HMC-backed float certainly didn’t rock the boat this week.
DigiCo’s next hope will be a Santa-fuelled rally through Week 51, which starts on December 16. Should everything tick up, investors may be more inclined to spend.
For now, though, DGT traded at $4.87 through to near close.
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