May was a record month in Israel’s local IPO market, with 14 prospectuses filed by new companies seeking to list on the Tel Aviv Stock Exchange. Seven have already completed listings, with a combined market value of more than 18 billion shekels. But many issuers were forced to accept steep valuation cuts, sometimes by tens of percent, in negotiations with institutional investors, and recent declines in the broader market have produced sharply different post-listing results.
The strongest performer so far is Galam, a food additives maker controlled by FIMI, whose stock has jumped about 28% since its early-month debut to a market value of about 1.3 billion shekels. FIMI sold shares worth 300 million shekels in the offering and still holds 29% of the company, now worth almost 390 million shekels. Other gainers include construction company Best, controlled by the Tanous family, which is up about 15% and trades at 3.3 billion shekels after meeting its initial 2.9 billion shekel target. Canadian real estate firm Almadev, formerly Elad Canada, has risen about 18% to nearly 1.1 billion shekels, while security and cleaning company T&M has gained 4% to about 800 million shekels.
The same month also brought two large capital raises by energy-related listed companies, Doral and Generation, each worth close to 1 billion shekels. Doral raised about 920 million shekels to increase its stake to 50% in U.S. subsidiary Doral LLC, pricing the deal at 83 shekels per share, a 23% discount to the market. Its stock has since fallen further, leaving participating institutions down about 11%. Generation raised 1 billion shekels to help finance the purchase of Shikun & Binui Energy and the construction of the Reindeer power station; its shares were sold at about 2.4 shekels, 11% below market, but now trade at 2.8 shekels, 16% above the issue price.
Not every discounted IPO has rewarded buyers. Tedehar, the largest Tel Aviv listing in more than a decade, is down about 10% and now valued at 7.1 billion shekels, even after cutting its planned valuation by about 15%. Military simulator maker Biga has dropped about 5% to 3.2 billion shekels after pricing about 20% below its original target. The sharpest decline came from Rustic Bakery, which fell 23% in three weeks to a value of about 760 million shekels, hurting institutional investors including Menora, which holds about 8%.
Despite the cooler market, most of the companies that started the process last month are still expected to complete their offerings in the coming weeks. One deal has already been canceled, Aviv Group, owned by Doron Aviv and Daphna Harlev, after institutions would not accept its 1.5 billion shekel target and it opted for debt instead. The companies still in the pipeline include Avisror, Kisu, Rafa, Orda, and Metalicon, while Repk Energy and drone maker Cando, controlled by Rami Levy, may also join.
