Australia's DigiCo REIT extends decline in second ASX session

HMC Capital

16/12/2024 03:24

Dec 16 (Reuters) - Shares of Australian data centre
landlord and operator DigiCo Infrastructure REIT  DGT.AX 
extended declines in their second trading session on Monday,
after marking the country's biggest initial public offering
(IPO) in six years.
    The stock was down 6.8% at A$4.24 as of 0318 GMT, after
falling as much as 11.7% earlier in the session. It had an offer
price of A$5.00.
DigiCo, which raised A$2 billion ($1.27 billion) in its IPO, the
biggest since Viva Energy's  VEA.AX  A$2.65 billion listing in
July 2018, is banking upon investor appetite for data centres,
driven by the demand for artificial intelligence-based services.
    However, investment research firm Morningstar last month
gave DigiCo a "high uncertainty" rating, with a fair value
estimate of A$3.40 per share.
    DigiCo manages an A$4 billion portfolio of data centres
across the United States and Australia. It said it will use part
of the IPO proceeds to buy two large-scale adjoining data centre
sites near Sydney with a contracted capacity of 20 megawatts.
    Shares in asset manager HMC Capital  HMC.AX , which retained
an 18.2% stake in DigiCo after its listing, fell as much as
11.3%, making it the top loser on the benchmark  .AXJO  index,
which was down 0.4%.
     
    ($1 = 1.5704 Australian dollars)

(Reporting by Aaditya Govind Rao in Bengaluru; Editing by Varun
H K)
((Aaditya.GovindRao@thomsonreuters.com;))