2022 to date has not exactly blown the lights out as far as IPOs have been concerned.
Those who have managed to get onto the stock market have had to face the slings and arrows of a cost of living crisis, rising interest rates, and of course, the Ukraine invasion. For those in the waiting room, some have decided to abandon ship, while others have chosen to postpone matters until conditions improve.
Blue Chip IPOs
What all of this has meant is that the IPOs that are still going ahead tend to be what could be described as the blue chip / blockbuster variety, with the likes of Arm, Revolut and Jaguar Land Rover still set to step up to the plate. With all of these it is perhaps it may be the valuations that are the most important aspect?
Pandemic IPO Winners
This point was underlined in the immediate aftermath of the pandemic, especially in the small-cap area, where valuations were cut to such an extent that the likes of Kistos (KIST), Pensana (PRE) and Tirupati Graphite (TGR) all got off to flying starts. This was perhaps helped by the logic that the companies that ventured into the stock market at the time of the pandemic had to be pretty sure of themselves.
The Georgina Energy IPO
A similar logic could perhaps be applied to the forthcoming helium/hydrogen/gas IPO Georgina Energy, set to list on AIM next month. Here the headline is that the company is set to exploit the massive squeeze in the helium market where prices have been rising by 10% a year for the past year. This is something that current followers of Helium One (HE1) already know, given that it is one of the most consistently followed small caps on the London market.
Helium One vs Georgina
That said, HE1 is not that small, with a market cap of just under £40m. It could very well be the case that fans of HE1 decide that Georgina is also a company to watch, especially as it is set to have a rather cheaper post-IPO market cap of £14m.
Georgina: Global Top Three Goal
The question is whether in Georgina we are looking at another of those underpriced/undervalued IPOs such as we were treated to during the pandemic. As things stand the answer looks to be yes. Looking under the bonnet of the company we are dealing with net attributable 2U prospective combined resources of 303 BCFG Helium, 308 BCFG Hydrogen and 2.95 TCFG gaseous hydrocarbons. Indeed, in March this year, Georgina completed an airborne AEM-PTP survey which identified a number of additional prospective targets.
All of this should be enough to back the company’s goal of being in the top three global helium and hydrogen producers, enough to get the market cap rather above the initial sub £20m zone
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.
