Virtual roadshows for IPOs are increasingly becoming the way to navigate the roadblocks created by the global spread of the coronavirus.
That was proven once again this week. Accepting that protracted lockdowns and quarantines are preventing any semblance of a regular IPO roadshow, Chinese biopharmaceutical company Akesobio opened a virtual order book for its $333m Hong Kong listing on Tuesday.
The issuer follows InnoCare Pharma and China Bright Culture Group with its virtual approach.
This rapid acceptance of online-only IPOs is worth paying attention to. The market may have been sceptical of virtual IPOs after China Bright Culture’s listing, when the television producer raised a relatively small $116m, or considered InnoCare’s $288m IPO to be a quirk. But with Akesobio joining the trend, online-only roadshows are now a realistic alternative for issuers.
Preparation is key, of course. Akesobio opted for a virtual pre-marketing process, which helped it launch its IPO with plenty of institutional investor interest in the bag. It also anticipates a hot turnout from Hong Kong’s retail investors.
It goes to show that despite Covid-19, and the safe distancing measures and lockdowns it has forced, investor demand for IPOs remains strong.
Asian issuers need to accept that the situation is unlikely to return to normal anytime soon, take their IPOs off the shelf and get deals flowing again.
So far, Asia is leading the way with virtual IPOs. Europe is yet to see online listings as countries there are still reeling from the growing impact of the Covid-19 outbreak.
A lack of confidence in market conditions, rather than concern around online-only listings, has brought the IPO market to a halt.
But once European markets stabilise and deal flow resumes, virtual IPOs offer a sensible way to open the market. Asia’s latest deals offer ideal templates.