Virgin Australia, the country’s second-largest airline, is set to make its return to public markets with a $685 million initial public offering, aiming for a June 24 listing on the Australian Securities Exchange (ASX). The IPO will value the business at $2.3 billion, and the fast-paced timetable reflects a strategy rooted in market timing.
Why the Rush?
Institutional backing is already locked in, and the bookbuild closed by Thursday, June 5. Advisers Barrenjoey, Goldman Sachs, and UBS are moving quickly to avoid any potential downturn in Qantas’ share price, which could weaken Virgin’s value proposition.
Qantas shares have surged 73% over the past year, fuelled in part by the collapse of regional rival Rex. If Qantas’ valuation were to fall, Virgin’s offer—priced at $2.90 per share—would no longer appear to carry the 30% discount currently being marketed as attractive relative to its larger peer.
At current pricing, Virgin’s IPO reflects a valuation of seven times its forecast net profit of $331 million, putting it on par with US airline peers, but below Qantas’ 10x earnings multiple.
Retail and Strategic Participation
Wilsons has also joined the advisory team, seeking to raise $100–125 million from retail investors. The public component of the offering opens June 6, following the lodging of the prospectus. Broker bids will be accepted between June 16 and 19.
Virgin’s private equity owner, Bain Capital, which acquired the airline for $700 million in 2020 after it collapsed under $5.15 billion in debt, will reduce its holding to 40%. As part of the float:
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30% of the business will be sold to the public,
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Qatar Airways will retain its 23% stake, acquired for $750 million last year,
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Virgin staff and management will hold 7.8%.
Bain’s remaining stake is locked up until FY26 results, after which it may begin phased sell-downs.
Valuation and Financial Metrics
Including $1.3 billion in net debt, Virgin will carry an enterprise value of around $3.6 billion. This equates to 3.4x forecast EBITDA of $1.06 billion for the current financial year.
The IPO structure mirrors the successful Guzman y Gomez listing of 2023, which also featured locked-in cornerstone investors and a lean, retail-friendly float.
Cautionary Notes
While the deal appears well-structured, history offers a cautionary tale. The Adore Beauty IPO, launched at a $635 million valuation during the pandemic, has since shrunk to just $66 million, illustrating the risks of buying at perceived peaks.
Some analysts warn that the days of IPOs offering steep 20–30% discounts to listed peers may be fading, particularly as private capital has become more selective and weighed down by leveraged portfolios. Yet with fewer competing listings and reduced private equity buying power, public equity investors may once again have the upper hand—for now.
