UPDATE 2-Tyro shares jump 35% in rare bright spot for Australian IPO investors

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(Recasts, adds detail, closing stock price)

By Scott Murdoch

Dec 6 (Reuters) – Tyro Payments delivered a rare win for Australian initial public offering (IPO) investors on Friday, with the electronic payment firm’s shares surging 35% on debut, bucking a recent trend of company floats being shelved.

About A$2 billion ($1.4 billion) worth of IPOs that were due to list on the Australian Securities Exchange have been put on hold since early October due to volatile global financial market conditions.

Tyro raised raised A$287 million from investors during its IPO process over the past week which gave the company a A$1.36 billion market capitalisation.

Tyro, which sells electronic payment machines and payment services via a digital app to businesses, earlier this week priced its shares at A$2.75 each – at the top of the range during an institutional bookbuild.

The stock hit a peak of $A3.55 per share and closed at $A3.348, with 18.42 million shares traded during the session.

The benchmark S&P/ASX200 index rose 0.36%, or 24 points, to 6707. Tyro’s successful listing follows the collapse of IPO deals including Latitude Financials, Property Guru, Retail Zoo and MPC Kinetic since early October.

Uncertain global financial market conditions, due mainly to the long-running Sino-U.S. trade war, were blamed for the deals being shelved.

Private equity involvement in each of the companies was also seen by some investors as a factor in keeping prospective buyers wary of the deals.

Tyro’s share price performance will be closely watched given financial services and fintech companies have been under increasing regulatory scrutiny in Australia.

Buy-now-pay-later company Afterpay recently released an independent report submitted to financial crimes regulator Austrac that found no wrongdoing by the company.

The regulator ordered the report after it found “reasonable grounds to suspect non-compliance” with anti-money-laundering and counter-terrorism financing laws.

Tyro’s largest shareholders will be Atlassian co-founder Mike Cannon-Brookes at 13.69%, and Australian investment firm TDM Growth Partners at 13.26%. Neither of those shareholders sold down stock in the IPO.

An updated list of the company’s top 20 shareholders published on the ASX on Friday showed those investors hold 67.1% of Tyro.

Tyro’s prospectus said it expected to report a fourth straight annual net loss in fiscal 2020.

However, it has delivered a compound annual growth rate of 29% in revenue and gross profits since 2014, a recent company presentation shows. Its gross profit is expected to grow about 20% in fiscal 2020 to A$100 million.

$1 = 1.4736 Australian dollars
Reporting by Scott Murdoch in Hong Kong; editing by Richard
Pullin

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