Shares in tough seed breeder Abundant Produce have soared on debut, more than doubling their issue price in a performance that indicates continuing strong interest in the Australian food sector.
Shares in the specialised seed producer, which breeds robust seed varieties for vegetables that can survive extreme conditions, climbed as high as 54 cents in a busy first day of trade on Tuesday, more than doubling their 20 cent issue price.
Abundant chief executive Tony Crimmins said the level of interest in the NSW-based but globally focused group had been surprising even after the IPO was priced to reward shareholders.
“We know that we have got a good company and we did undervalue it… but what’s unexpected is the sheer volume of interest,” Mr Crimmins told AAP.
“What they see is we are creating a business in Australia that is smart, that is innovative.”
Abundant’s $3.5 million IPO was oversubscribed, with Australian investors dominating the share register.
Abundant shares closed at 55 cents, giving the company a market capitalisation of around $9.6 million, with more than two million shares traded.
Mr Crimmins said local investors were hungry for a stake in an Australian product that is geared to a growing global demand for food.
By reinvigorating Australia’s seed industry, which was strong in the 1980s, Mr Crimmins said he was simply taking the sector into the 21st century.
Abundant’s tough cucumber seeds already sell through Bunnings and US-based seed giant Burpee.
They will be followed shortly by tomatoes, chillies and pumpkins and other offerings are in development.
The company has worked with Sydney University’s Plant Breeding Institute to create hybrid seeds through techniques such as cross-breeding.
Breeding vegetables with native species and raising them in the harsh Australian summer gave Abundant’s seeds an edge on international competitors, Mr Crimmins said.
Mr Crimmins said his firm was competing against products from countries including Holland, where seeds are “bred in beautiful, luxurious greenhouses”.
“Ours aren’t done that way, they are treated pretty harshly,” he said.
“We are in a very good spot, because who can replicate Australia’s environment?”