Ayondo Limited’s Initial Public Offering: What You Need to Know

Ayondo Limited is set to be the first company from the financial technology (fintech) sector to be listed on the local stock market. Here are 10 things that you should note about the firm’s initial public offering (IPO):

1. Ayondo, which considers itself as one of the fintech pioneers in Europe, offers “innovative trading and investment solutions for retail and institutional customers”. Its services include social trading (through its WeTrade platform), self-directed trading (through its TradeHub platform) and casual trading. The firm’s subsidiaries are authorised and regulated in the UK and Germany. It has additional offices in Singapore, Spain and Switzerland.

2. The company’s social trading platform allows traders to follow the trades of other traders on a real-time basis. As for its self-directed trading, it offers contract for difference (CFD) and spread bet trading in instruments such as forex, commodities, treasuries, cryptocurrencies and shares. Last but not the least, the casual trading business aims to educate and empower its customers and potential customers.

3. In its prospectus, Ayondo lists a few competitive strengths such as: a) having a scalable business model with diversified revenue streams; b) owning award-winning proprietary platforms; and c) running ayondo Account Management System, which offers customised business intelligence to its business-to-business partners.

4. The company feels that the social trading market has room to grow. It said that it believes “the social trading market will continue to grow in Europe particularly UK and Germany, and in Asia, particularly Singapore and the PRC, where there is ready infrastructure for the development and growth of the social trading market”. Social trading is a fast-growing innovation, with an average growth rate of 213%, according to a report on the fintech market in Germany.

5. As for the IPO, a total of 80.77 million shares will be on offer at a price of S$0.26 apiece. 8.9 million shares are set aside for the public, while the rest will be reserved for retail and institutional investors who apply through their brokers or financial institutions.

6. The listing is expected to raise net proceeds of around S$18.5 million. Ayondo plans to use the money to expand its business through platform enhancement (S$2.1 million) and marketing (S$5.3 million), for general working capital purposes (S$2.6 million) and to repay loans (S$8.5 million).

7. Post-IPO, Ayondo would have a market capitalisation of S$130.7 million.

8. The company has been loss-making. For the financial year ended 31 December 2016, it had CHF 18.9 million in revenue and a net loss of CHF 10.2 million. For the first nine months of 2017, it clocked in a net loss of CHF 6.6 million, on the back of CHF 14.7 million in revenue. It did not produce any cash flow from operations in both the periods as well. As of 30 September 2017, it had CHF 1.4 million in cash and bank balances, and CHF 15.9 million in total borrowings.

9. At an IPO price of S$0.26 and post-IPO share capital of 502.7 million shares, Ayondo would be going at around 2.2 times its latest net asset value per share. The firm does not have a dividend policy.

10. The IPO closes on 22 March 2018 (12:00 pm), and trading is expected to commence on 26 March 2018 (9:00 am).

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.