How to Invest in IPOs in Australia

Key takeaways

• IPO activity has picked up, with improving market sentiment and a strong pipeline suggesting that 2026 could be an important year for global listings, including potential high profile names such as SpaceX and OpenAI.

• IPOs may offer early access to fast-growing companies, but they often involve higher volatility, limited track records and an increased risk of overvaluation.

• Australian investors can access stocks that have recently IPO’d via CMC Invest, however thorough research and realistic expectations remain essential before investing.

After a strong rebound in the IPO market in 2025, 2026 could be another important year for global listings. Improving investor sentiment and a growing pipeline of high-profile private companies rumoured to go public, including names such as SpaceX and OpenAI, have put IPOs back in the spotlight. Let’s unpack how IPOs work, how Australian investors can access them, and which opportunities may be worth keeping an eye on.

What is an IPO?

An initial public offering, or IPO, is when a private company sells some of its shares to the public for the first time. Before that, ownership is usually limited to founders, employees and private investors such as venture capital or private equity. Once a company IPOs, everyday investors can buy shares on the stock market.

Think of it like a lemonade stand. At first, you run everything using money from sales and your own savings. Your focus is on covering costs and keeping the stand going. Over time, your lemonade becomes popular and you build a strong reputation. Now you want to expand into ten more stands across town, but you do not have enough cash to do it on your own. At that point, you have two main options. You can borrow money from the bank and commit to regular repayments, or you can sell a portion of your business in exchange for cash.

An IPO is the second option. Instead of raising funds through debt, a company raises capital by selling shares to public investors, who become part owners of the business. This can allow a company to fund growth without fixed loan repayments, while spreading risk across a large group of investors who are backing the company’s future performance.

How does an IPO work?

The process starts with a company choosing an exchange such as the New York Stock Exchange, Nasdaq or the ASX. It also selects an underwriter, usually an investment bank, which helps set the price and find investors. The company then prepares a prospectus, which lays out audited financial results, risks and growth plans. After this, executives go on a roadshow to pitch the business to large investors and gauge demand. Based on the feedback, the final offer price is set and shares are allocated. On listing day, trading begins when the market opens. From that point, supply and demand take over. If appetite is strong, the stock can jump above its offer price straight away. If confidence is weaker, it can fall below.

^{Cloud-based artificial intelligence computing company CoreWeave listed on the Nasdaq exchange on 28 March 2025.}

Why do companies IPO?

As with our lemonade stand example, raising money for expansion is a key motivation for companies to go public. But there are also other reasons:

1. Give early investors and employees a chance to cash out – People who invested in or helped build the company often hold shares that are hard to sell while it is private. An IPO gives them a chance to turn those shares into money.

2. Build brand recognition and trust – Being listed on a stock exchange makes a company more visible and signals maturity. Customers, suppliers and partners are more likely to see it as stable and trustworthy.

3. Use shares to buy other companies – Once shares are publicly traded, a company can use them as part of the payment when acquiring another business.

4. Reward and attract staff – Public companies can offer shares or stock options as part of pay packages. This helps bring in new talent and keeps existing employees motivated.

5. Strengthen finances – Money raised from an IPO can be used to pay off debt, leaving the company in a healthier financial position and giving it more flexibility to grow.

How to buy IPO stocks in Australia: A step-by-step guide

1. Open an account with CMC Invest: If you don’t already invest with us, open a CMC Invest account in under 10 minutes using your TFN, ID and bank details. Once funded, you’re ready to start investing in shares and ETFs.

2. Monitor upcoming listings: Clients can monitor companies that plan to list by following publicly available IPO information. This may include:

   • CMC News & Analysis

   • Global IPO calendars such as Nasdaq and Yahoo Finance

   • ASX Upcoming floats and listings

   • Company investor relations updates

3. Trade the stock once it lists: If a company completes its listing and the stock becomes available on the CMC Invest platform, clients can place a trade in the same way they would for any other share. 

4. Monitor your investment: Once the stock is added to a client's portfolio, they can monitor its performance over time. Within the platform, clients can use the TradingView charting integration to view price movements and historical data. Clients may also follow publicly available company updates, announcements, financial reports and earnings releases as they are released.

How CMC Invest handles IPOs

We know IPOs can be exciting, and at CMC Invest, we are always on the lookout for new listings that matter to our investing community. Each week, we review upcoming IPOs with a focus on companies expected to list with a free float market cap above 500 million AUD. This helps us prioritise the larger names that are likely to generate the most interest. To be eligible, the IPO must also be listed on a market offered by CMC Invest, either in Australia or across our 15 international markets.

We aim to make major IPOs available on the platform as quickly as possible once trading begins. In some cases, shares from major IPOs will be available to trade on CMC Invest soon after they list on the exchange, while in others it may take a few days to complete the necessary setup and checks. We work closely with market partners and continuously monitor listings to ensure they meet our standards. You can be confident that we are actively working behind the scenes to bring top IPOs to you as quickly as possible.

Risks and considerations when buying IPO stocks

1. Overvaluation driven by hype - Investor demand and media excitement can inflate IPO prices beyond what a company’s fundamentals justify. When sentiment turns, stocks may correct sharply. Hype around an IPO can lead to an inflated offer price, increasing the risk of long-term underperformance. Studies of IPOs from 2010 to 2020 indicate that while about half outperform the market in the days immediately following their listing, most tend to lag the broader indices after one to three years. In one analysis, almost two-thirds of IPOs were more than 10% behind the market three years post-listing.

2. Market volatility: IPOs often experience significant price swings in early trading as the market reacts to limited information and initial sentiment.

3. Limited historical data: Newly listed companies typically have less public trading history, fewer disclosures and limited analyst coverage compared to established firms.

4. Industry-related risks: Depending on the sector, IPOs may face regulatory, technological, or commodity-related challenges that can impact performance.

Potential IPOs to watch in 2026

Below is a snapshot of high-profile companies rumoured to be considering an IPO in 2026, along with indicative valuation ranges.

^{Source: Vertu}

Note: Potential listing timeframes and valuation ranges are speculative and based on market commentary. There is no certainty that these companies will list publicly, or that any listing would occur at the valuations shown.

How to stay ahead of upcoming IPOs

Want to stay ahead of the next big listing? Here’s how to keep on top of upcoming IPOs.

1. Follow trusted financial news sources - Monitor outlets like Bloomberg, Reuters, and the ASX and Nasdaq news feeds for confirmed IPO announcements and updates.

2. Use dedicated IPO calendars - For Australia, refer to the ASX’s Upcoming Floats & Listings page. For U.S. IPOs, check the relevant exchange calendar, such as the Nasdaq IPO calendar.

3. Tune in to CMC Invest updates - Keep an eye on our emails, articles, and push notifications for insights on trending markets and themes, as well as major IPOs making headlines. You can also turn on push notifications for reactive updates, including alerts around IPO volatility, when new listings go live, and other key market movements.

4. Monitor company filings and press releases - Prospectuses, ASX announcements, and regulatory disclosures often hint that a business is gearing up to list.

5. Watch for market chatter and pre-IPO coverage - Analyst reports, industry publications, interviews, and media speculation can provide early signals of companies likely to go public.

Ready to explore upcoming IPOs?

Discover and trade IPOs alongside thousands of other global opportunities with CMC Invest. Access more than 2,500 ASX-listed shares and ETFs, as well as over 45,000 international stocks and ETFs across 16 major markets, all from one account.

Sign up or log in today to start exploring new listings and uncovering the next wave of investment opportunities.

Disclaimer: This article provides general information only. It has been prepared without taking account of your objectives, financial situation or needs. It is not to be construed as a solicitation or an offer to buy or sell any financial instruments, or as a recommendation and/or investment advice. It does not intend to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any financial instruments. You should consider your objectives, financial situation and needs before acting on the information in this article. CMC Markets believes that the information in this article is correct, and any opinions and conclusions are reasonably held or made on information available at the time of its compilation, but no representation or warranty is made as to the accuracy, reliability or completeness of any statements made in this article. CMC Markets is under no obligation to, and does not, update or keep current the information contained in this article. Neither CMC Markets nor any of its affiliates or subsidiaries accepts liability for loss or damage arising out of the use of all or any part of this article. Any opinions or conclusions set forth in this article are subject to change without notice and may differ or be contrary to the opinions or conclusions expressed by any other members of CMC Markets.