Liberty’s value surges following IPO

Liberty Financial Group (Liberty) has seen its market capitalisation rise by $680 million since December 2020, following its initial public offering (IPO) two months ago.

The lender, which was admitted to the official list of the Australian Securities Exchange (ASX) under the code LFG following the successful completion of its IPO in mid-December last year, commenced trading on a normal settlement basis from 17 December 2020. (Liberty’s existing shareholders retained a 77.4 per cent ownership interest in the company).

After raising approximately $321 million at an offer price of $6.00 per security in its IPO, the market capitalisation at listing was approximately $1.8 billion.

However, bid offers are now nearing $8.00 per security, with the lender estimated to have a market capitalisation of around $2.4 billion as of yesterday (8 February).

The increase comes amid a booming mortgage market. Indeed, Australia has been experiencing record levels of mortgage lodgements and home buying activity, amid record-low interest rates and a swathe of government incentives (such as the First Home Loan Deposit Scheme, the First Home Super Saver Scheme, HomeBuilder grant or state and territory First Home Owner Grants and stamp duty concessions).

Liberty Financial CEO James Boyle noted last year that the lending market in Australia represents “a considerable opportunity” for Liberty, given that the total addressable residential mortgage market is estimated to be $222 billion in Australia, $14 billion in each of the SME lending market and motor vehicle finance and $25 billion in the personal finance market.

The CEO said the IPO provides the non-bank with access to equity capital markets to pursue future growth opportunities.

He commented at the time: “As a listed group, we’ll continue seeking new and differentiated ways to help customers with their financial needs. 

“Access to equity capital means we have even more ways that we can think about that going forward. I’m excited about our prospects for the future and pleased to welcome our new investors on this journey.”

As well as Liberty, several other lenders have been looking to the stock market as an option for growth recently. 

Non-bank lender Plenti listed on the ASX last year after completing an initial public offering (IPO), which raised $55 million from the take-up of new shares by institutional and retail investors, while marketplace lender SocietyOne last week confirmed that it was also considering a float as it looks to raise capital and launch new products.

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