The eye-popping sums raised by land-based aquaculture producers on public markets in the past year is likely to lure even more onto the market, particularly with investors piling into projects that have little to no production, market watchers told IntraFish.

A slew of land-based companies -- six in all -- have taken to the public markets in the past six months alone. In addition, listings for Per Grieg-backed land-based salmon farmer Proximar and land-based sole and turbot farmer Stolt Sea Farm are underway, while other groups, such as US project AquaCon, have said they will pursue IPOs as well.

Since last year, land-based IPOs have included Salmon Evolution, who's land-based plans and partnership with South Korean seafood giant Dongwon propelled it to a hugely oversubscribed listing; Andfjord Salmon, valued at NOK 2.1 billion (€195 million/$221 million) on its first day of trading; Netherlands-based Kingfish Company, which debuted on the Merkur Market in November; Nordic Aqua Partners, a group building a land-based salmon farm in China, which debuted on Oslo Stock Exchange's Euronext Growth in December.

In addition, Atlantic Sapphire, the world's largest land-based salmon farmer, moved to the mainboard of the Oslo Stock Exchange in May, and in January began trading on New York's over-the-counter securities market.

Danske Bank Markets analyst Knut Ivar Bakken said with a new land-based project unveiled seemingly every week, it will be interesting to see how many of them will ultimately be financed.

Bakken expects more land-based initiatives in 2021 to look at doing a listing as part of financing for projects.

"I think it's quite clear that we are going to see that," he told IntraFish.

A widespread perception that underlying demand for salmon remains and will remain strong -- despite the challenges posed by the coronavirus pandemic -- plays to the advantage of land-based firms, the analyst said.

Demand from foodservice sector has been battered by the pandemic as restaurants stayed shut or turned to takeaway services with consumers stuck at home under lockdown conditions. But with vaccination programs getting underway, there is hope that some kind of normality will return to daily life this year.

Pareto Securities analyst Carl-Emil Kjolas Johannessen highlighted a wide variation between land-based companies that have been listed so far, led by Atlantic Sapphire, which has by far the largest market cap.

Given how much has been invested in Atlantic Sapphire, the market caps of the newcomers don't appear that high by comparison, the analyst noted.

"But of course the others have gotten quite a high valuation so that will attract more companies," Johannessen told IntraFish.

"It will still be important to raise equity but eventually I guess the banks will be more willing to lend these companies money."

While the number of listed land-based projects is small, a major trump card is that investors are becoming more comfortable with them, and the risks they bring, according to DnB Markets analyst Alexander Aukner.

"I think they will go for IPOs or capital raising regardless, it's more a matter of timing," he told IntraFish.

One thing land-based producers can argue is that their projects promote lower environmental, social and corporate governance (ESG) risks, which could help attract investors with a focus on climate change mitigation, environmental management practices, working and safety conditions and compliance to relevant laws and regulations, the analyst said.

Having seen the success of the latest land-based IPOs, the some 80-90 projects in the pipeline will be tempted to go down the same path, Aukner told IntraFish.

But they shouldn't expect it to be easy.

"It's still difficult to raise capital, you have got to have the right pedigree, technology and business plan," he said.

Finance

Analysts: Brace yourself for even more land-based aquaculture IPOs