After 70 IPOs so far this year, it seems that the Tel Aviv Stock Exchange has reached the selectivity stage. An updated draft prospectus from Erika Carmel, developer and marketer of pain relieving medical device B Cure Laser, reveals that the company has had to cut almost by half the valuation sought in its initial offering, to NIS 430 million, from an original aspiration to a valuation of around NIS 800 million.
Erika Carmel will seek to raise nearly NIS 90 million, while its existing shareholders, headed by chairperson Michael (Miki) Schlosser, will sell holdings to the tune of NIS 20 million.
The deep cut in Erika Carmel's valuation as its IPO approached is explained by a market source by the fact that "the market has become more selective." It comes a short time after Econergy Renewable Energy completed an IPO after also cutting its valuation by half from its originally planned level. The company raised NIS 150 million at a valuation of NIS 1 billion. Shareholders Eyal Podhorzer and Yoav Shapira had to forego an accompanying offer for sale.
One market source said today said, "Although there's still lively activity in offerings, it looks as though on the whole the market has calmed down, and the institutions are a little tired from the intense wave of IPOs of the past few months."
Sources also mention the decline in the number of players. The acquisitions of Psagot by Altshuler Shaham and of Halman-Aldubi by The Phoenix "reduce the number of possibilities on the market and make it tougher." "To ensure that an offering will go ahead, you have to reach agreement with several large institutions, that take advantage of their strength to bring down the price," another source said.
Published by Globes, Israel business news - en.globes.co.il - on July 22, 2021
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