Interactive Investor

AOTI becomes AIM’s biggest IPO in over two years

After a barren few years, more larger companies are choosing London to list their shares, among them this fast-growing medical technology business.

18th June 2024 15:26

by Graeme Evans from interactive investor

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AIM’s biggest IPO in more than two years today fuelled hopes that more stock market newcomers will follow last week’s strong debut by Raspberry Pi Holdings (LSE:RPI).

The admission of AOTI valued the high-growth medical technology business at £140 million, representing the largest new listing on London’s junior market since February 2022.

Total proceeds of £35.1 million via the placing of 26.6 million shares at a price of 132p were the largest since December 2021. AOTI added 4p after dealings got under way earlier today.

California-based AOTI is focused on the $5 billion (£3.9 billion) “hard to heal” advanced wound care market segment, in particular diabetic foot ulcers, venous leg ulcers and pressure ulcers.

The company generated $43.9 million in revenue in 2023 and has achieved compound annual growth of 38% since 2021 amid stronger demand for its patented non-invasive technology.

It holds an 80% share of the topical wound oxygen therapy segment and has been profitable at the adjusted earnings level since 2017.

The £19.5 million proceeds from today’s admission of new shares will be used to support expansion of AOTI’s sales team in the US and for opening up new territories.

In addition, existing shareholders have generated £15.6 million by selling some of their stakes.

Today’s debut follows the successful listing of low-cost computer maker Raspberry Pi, which was priced at 280p for an initial value of £541 million in last Tuesday’s IPO.

It now stands at 429.8p, a jump of 53% for retail investors who received a maximum allocation of 365 shares per applicant equivalent to £1,022 at the start of conditional dealings.

Those who entered the fray at 412p when unconditional trading got under way on Friday have seen the price drop back from a peak of 498p set during that day’s strong session.

Raspberry Pi performance chart

Source: TradingView. Past performance is not a guide to future performance.

The overall level of demand should boost confidence that the wider IPO market is finally picking up speed after a barren couple of years for stock market debuts.

City broker Peel Hunt said last week it expects an increasing number of flotations in the second half of the year before a broader re-opening in 2025.

Recent speculation has focused on the potential London listing of Chinese-founded fast fashion chain Shein, although that $66 billion (£52.3 billion) flotation is not due until later in the summer and is unlikely to be eligible for the FTSE 100 index.

Peel Hunt said: “Although the number of announced or priced UK IPOs remains small, it is positive to see the activity levels gradually increasing. Broader market indicators continue to improve and the market remains open for select issuers.”

AIM stocks tend to be volatile high-risk/high-reward investments and are intended for people with an appropriate degree of equity trading knowledge and experience. 

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