When is a company ready to float? Your IPO questions answered

Firmus is about to test the ASX with one of the biggest listings in its history. Here is what actually makes a company decide to go public, how a bookbuild sets the price, and why many good companies never list at all.

Firmus, the AI data-centre builder, is due to start trading on the ASX on 22 October 2026 and plans to raise about A$7 billion, according to a term sheet reported by Reuters. It has every founder in the country asking the same questions.

An initial public offering (IPO) does three main things. It raises a large amount of money from a wide pool of investors. It gives early backers and staff a way to sell some of their shares, because listed shares can be traded every day. And it gives the company a currency, its own shares, that it can use to pay for acquisitions or reward employees.

The ASX has been busier lately. There were 100 new listings in the 2025-26 financial year, up from 69 the year before, and companies raised A$5.6 billion through IPOs, according to the ASX. "FY26 marked a constructive step forward for Australia's listings market," said James Posnett, the ASX's general manager of listings.

The ASX has minimum tests. A company needs at least 300 investors not connected to it, each holding at least A$2,000 worth of shares, and at least 20 per cent of its shares available to trade freely. It must then pass either a profit test, broadly A$1 million in profit over three years including A$500,000 in the most recent year, or an assets test, such as A$4 million in net tangible assets or a market value of $15 million.

Passing the tests is the easy part. Being ready also means having audited accounts, a board that can meet public-company governance standards, and a business stable enough to report on every six months without nasty surprises.

In a bookbuild, the company's advisers, known as lead managers, ask large investors such as fund managers how many shares they want and at what price. Those bids form the "book." The company and its advisers then use the book to set the final offer price and decide how many shares each investor gets. Some big investors may commit early as cornerstones, which signals confidence to others. Retail investors usually apply afterwards, at the price set by the institutions.

For Firmus, institutional bidding is scheduled for 6 and 7 October 2026, with the prospectus due on 8 October 2026 and retail applications from 12 to 19 October 2026.

Because they can. Private investors, from venture capital to superannuation funds, can now write very large cheques, which removes one of the main reasons to list. Staying private also avoids continuous disclosure, the scrutiny of half-yearly results and the pressure of a share price that moves every day. Several companies that looked set to list this year chose to sell to other businesses instead, according to law firm HSF Kramer.

Less than you might think. A big first-day jump says more about how the offer was priced and how much demand was left unmet than about the company's long-term value. The things that matter are in the prospectus: revenue, profit or the path to it, how the money raised will be used, and how many existing shares are locked up and for how long.

An IPO is a financing decision, and increasingly an optional one. For many strong Australian companies, the smart default is to stay private until listing solves a specific problem, such as needing more capital than private investors will provide or giving long-term backers a way out. Firmus fits that profile, which is why its float matters as a test of public appetite for AI infrastructure. We expect the second half of 2026 to be busier for listings than the first, but not every company that could float should.