AIM-listed companies have raised a massive £3.8bn through secondary fundraising in the year to September 30, up 73% from £2.2bn in 2019.
Since the lockdown started on March 23, 220 junior firms have raised extra capital ether to repair their balance sheets or to take advantage of growth opportunities created by the crisis.
“The speed at which AIM companies have been able to undertake emergency fundraisings has helped stop the stock market from being routed,” said Daniel Hutson, partner at UHY Hacker Young, the accountancy group that published the study.
“If those emergency fundraisings had been unsuccessful then we would have seen a lot more damaging speculation over the future of those businesses. Those emergency fundraisings have kept customers and creditors onboard and probably saved many of jobs.”
According to UHY Hacker Young, it shows the benefits of being listed rather than remaining a private company, while investors have been rewarded by the AIM all-share index already having returned to pre-coronavirus levels in just six months.
Moreover, the recent trend has seen secondary fundraises being proposed to buy new assets rather than to recover from the pandemic – such as Warehouse REIT (LON:WHR) tapping investors for £153mln to expand its portfolio of properties.
Meanwhile, there is hope that more IPOs will be on the way after digital mental health provider Kooth PLC (LON:KOO), restaurant group Various Eateries PLC (LON:VARE) and esports team developer Guild Esports PLC (LON:GILD) floated in the last few weeks, while mobile payments provider Fonix is planning a listing.
“The next step will be for IPOs to come back to the market. It’s completely understandable that a lot of floats have been shelved over the past six months but sentiment is now much more positive. While there won’t be a flood of IPOs immediately, there are a lot of companies making plans to float in the coming months.”
Published at Mon, 05 Oct 2020 07:00:00 +0000-AIM-listed companies see secondary fundraisings boom despite pandemic