Two IPOs priced this past week, led by energy play Atlas Energy Solutions (AESI), which completed the second largest IPO of the year to date. Several small deals delayed (IZM, NAVA, NFTU, OPHV), and in an uncommon move, online retailer PishPosh (BABY) postponed its $9 million IPO one day after announcing pricing.
Frac sand miner Atlas Energy Solutions priced below the range to raise $324 million at a $1.8 billion market cap. Led by successful oil and gas founder Bud Brigham, Atlas mines sand in the Permian Basin for use in oil & gas fracking, controlling over 14k acres of open-dune sand reserves. The company expects to spend over $600 million over the next two years to complete its current initiatives. Atlas finished down 8%.
Xiao-I (AIXI) downsized and priced at the low end to raise $39 million at a $490 million market cap. Its portfolio of cognitive intelligence technologies is based on natural language processing and AI implementation, with a focus on conversational AI, and it serves businesses primarily in China. The company has demonstrated growth and margin expansion, though continued investment in R&D is expected to weigh on profitability. Xiao-I finished down 5%.
| 2 IPOs During the Week of March 6th, 2023 | |||||
|---|---|---|---|---|---|
| Issuer Business | Deal Size | Market Cap at IPO | Price vs. Midpoint | First Day Return | Return at 03/10 |
| Xiao-I (AIXI) | $39M | $490M | -13% | -15% | -5% |
| Chinese cognitive intelligence company focused on conversational AI. | |||||
| Atlas Energy Solutions (AESI) | $324M | $1,800M | -16% | -6% | -8% |
| Mines in-basin Permian frac sand for the oil and gas industry. | |||||
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Five companies submitted initial filings, led by ZKH Group (ZKH), a Chinese B2B procurement platform for industrial supplies. If the company were to raise $200 million, ZKH’s offering would be the largest US IPO from a Chinese issuer since October 2021. Other large news from the pipeline came from Vietnamese EV manufacturer VinFast Auto (VFS), which disclosed 2022 financials ahead of its estimated $1 billion US IPO.
| 5 Filings During the Week of March 6th, 2023 | |||
|---|---|---|---|
| Issuer Business | Deal Size | Sector | Lead Underwriter |
| Lafayette Energy (LEC) | $7M | Energy | Aegis Cap. |
| Oil and gas E&P operating in Louisiana. | |||
| Tungray Technologies (TRSG) | $13M | Industrials | Tiger Brokers |
| Provides customized industrial manufacturing services in Singapore and China. | |||
| Davis Commodities (DTCK) | $17M | Consumer Staples | Univest Sec. |
| Singapore-based commodity trading company focused on sugar, rice, and fats. | |||
| Himalaya Shipping (HSHP) | $10M | Industrials | DNB Markets |
| Acquiring a fleet of vessels for maritime shipping of bulk dry goods. | |||
| ZKH Group (ZKH) | $200M | Technology | Goldman (Asia) |
| Chinese B2B procurement platform for industrial supplies. | |||
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In the private company sphere, SoftBank-backed Arm grabbed headlines with reports that it could raise $8+ billion in a US listing. The chip designer joins a growing list of tech names that are eyeing 2023 IPOs.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 3/9/2023, the Renaissance IPO Index was up 9.0% year-to-date, while the S&P 500 was up 2.4%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Airbnb (ABNB) and Snowflake (SNOW). The Renaissance International IPO Index was down 2.8% year-to-date, while the ACWX was up 4.8%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Porsche and Kuaishou.
