After Elon Musk’s blockbuster SpaceX float injected new life into Wall Street’s IPO market, Australia could be about to follow suit this week as it prepares to welcome the country’s biggest initial public offering of 2026.
Construction and fitout business FDC Consolidated is due to hit the boards on Thursday with a market capitalisation of about $1 billion.
After raising $400 million in its IPO, it is about to overtake retailers SkinKandy and Koala as the ASX’s biggest float this year.
Investors are hopeful that a successful debut will encourage others to list in Australia, given the pipeline of upcoming floats headlined by homegrown artificial intelligence players Firmus and Sharon AI.
“FDC will likely be the firing gun for the ASX’s IPO cycle,” said MST Financial senior investment strategy analyst Hasan Tevfik.
“It’s already heating up in the US following the ambitious float of SpaceX, but when you look at the actual level of issuance, it suggests there’s more to come and that will flow through to Australia.”
Investors have questioned whether Wall Street’s IPO market is nearing a peak, given the scale and ambition of SpaceX’s float and the coming blockbuster listings of artificial intelligence giants Anthropic and OpenAI.
But MST pointed out that global IPO issuance, or the value of new shares hitting the equity market via fresh listings, totalled $US350 billion ($504 billion) over the past year. While that sounds big, it represents just 0.3 per cent of global market capitalisation.
When adding follow-ons such as share placements and rights issues, so-called gross equity issuance sits at $US1.1 trillion for the past year, representing 1.1 per cent of market capitalisation.
Tevfik said a figure closer to 1.5 per cent historically indicated the IPO market was starting to peak.
Under pressure
Indeed, gross issuance reached that level after the pandemic, when equity markets were awash with central bank liquidity. Before that, it peaked at about 2 per cent of market cap in 2015-2016.
“Global IPO activity looks to be emerging from the bottom of the cycle rather than approaching a peak,” said Tevfik.
In Australia, the health of the IPO market has been particularly weak compared to historical levels.
Gross issuance, calculated by IPOs plus follow-ons, has totalled $45 billion over the past year, about 1.5 per cent of the ASX’s market value. That is half the long-run average of about 3 per cent.
“IPO activity is especially anaemic relative to Australia’s own history, and the excitement taking hold in the US has not spread Down Under yet,” said Tevfik.
“But this could be changing – our expectation of further upside in equities provides a fertile ground for more issuance activity.”
The global AI build-out is fuelling a fresh wave of ASX hopefuls that are looking to capitalise on the hype permeating global financial markets.
While FDC is a construction company, it has talked up its exposure to AI infrastructure, given its clients include data centre operators such as ASX-listed NextDC and US-listed Digital Realty.
Other potential AI-focused candidates include the highly anticipated IPO of data centre developer Firmus, chip designer Morse Micro, AI infrastructure business SCX.ai, Nasdaq-listed neocloud Sharon AI, and AI-enabled jobs platform swipejobs.
“We’re going to see a flood of IPOs in this AI and data centre space if the market is willing to keep pricing existing stocks like they are,” said Forager chief investment officer Steve Johnson.
“The whole Australian sharemarket has struggled over the past year because we don’t have much exposure to the AI sector, so there is huge investor demand to participate in this bubble, and companies will always try and feed that,” said Johnson.
Past performance, future performance
However, fund managers remain wary given the shocking performance of recent ASX floats.
Of the 17 companies to have debuted on the local bourse so far this year, just six were trading higher since hitting the boards, as of July 1, while a third of those debutants have shed more than 20 per cent of their value.
“I’m optimistic the IPO market is getting better, but I’m not sure if that’s a bit deluded,” said Dean Fergie, portfolio manager at Cyan Investment Management.
“There’s been a few good ones recently, but there’s also been some disasters, and I think the local market is getting a bit of a halo effect from SpaceX’s float, which has added a more positive vibe to the market.”
Looking further back, Australian IPOs have a mixed track record.
The median float typically outperforms soon after listing, particularly in the first two weeks. But from there, returns tend to fade, and by the 12-month mark, IPO investors have underperformed.
However, MST said returns typically improved when there were fewer IPOs.
“These periods are usually less buoyant, leaving issuers with less scope to overprice new paper,” said Tevfik. “Australia remains in a low-IPO period today.”
Source: https://www.afr.com/markets/equity-markets/asx-s-biggest-float-of-2026-to-kickstart-anaemic-ipo-market-20260708-p60dip