Virgin Australia Returns to Australian Stock Exchange after $439 Million IPO.

Virgin Australia is set to return to the Australian Securities Exchange after raising $439 million in an initial public offering. The airline sold 236.2 million shares at $2.90 each, valuing it at $2.32 billion. Bain Capital, which bought Virgin for $3.5 billion, will see its stake reduced to 39.4% from 70%, while Qatar Airways will retain 23%. The IPO attracted strong demand and is expected to revive Australia's subdued IPO market.

Virgin Australia is set to return to the Australian Securities Exchange (ASX) following a successful initial public offering (IPO) that raised A$685 million. The airline sold 236.2 million shares at A$2.90 each, valuing it at A$2.32 billion on a fully diluted basis [1]. This IPO marks a significant milestone for the airline, which was delisted in 2020 after entering administration.

The IPO has attracted strong demand, with institutional investors lodging indicative orders worth more than the deal when bookbuilding began [1]. The pricing at an almost 30% discount to Qantas shares was an incentive to buy, according to fund managers [1].

Bain Capital, which bought Virgin for A$3.5 billion including liabilities, will see its stake reduced to 39.4% from about 70%, while Qatar Airways, which recently bought into the airline, will retain 23% [1]. The IPO is set to deliver a fee windfall for investment banks Goldman Sachs, UBS, and Barrenjoey with 2% of proceeds paid to underwriters, the prospectus showed [1].

The IPO is expected to revive Australia's subdued IPO market, which has seen flat-lined volume over the past few years [1]. "A successful Virgin debut will help revive Australia's subdued IPO market," said Jun Bei Liu, founder of Ten Cap, a Virgin cornerstone investor [1].

Virgin Australia's return to the ASX comes after a period of restructuring under Bain Capital's ownership. The airline has made significant strides in improving its financial health and operational efficiency. It reported its first statutory profit in a decade for the FY-23 and forecast an underlying net profit after tax (NPAT) of A$330 million in FY-24 [1]. The airline has also simplified its fleet, reducing maintenance and training costs, and has a strong domestic market share of 31.2% as of June 2025 [1].

However, the IPO still carries noteworthy risks. One-off boosts, such as the cancelled-credit break-back in FY-24, and the airline's mid-market positioning could pose challenges [1]. Additionally, the airline still faces structural challenges, including a significant amount of net debt and a business model straddling both budget and full-service niches [1].

Investors must weigh the appeal of a cleaner, leaner Virgin against the reality that airlines remain highly cyclical, and that this IPO is not raising fresh capital for innovation or expansion. The post-listing performance will hinge on whether Virgin can consistently deliver earnings without the benefit of one-offs and whether the market believes it deserves to close the valuation gap with Qantas.

References:
[1] https://www.ig.com/au/trading-strategies/virgin-australia-ipo--the-complete-investor-s-guide-250623
[2] https://www.reuters.com/world/asia-pacific/virgin-australia-shares-set-debut-after-439-million-ipo-2025-06-23/