Sources: Firmus plans to allocate ~50% of its IPO shares to existing holders, as investor demand far exceeds the offer size in one of Australia's largest IPOs

You can now get shares in one of Australia's largest IPOs, but only if you were already an investor.

Firmus Technologies, an artificial intelligence infrastructure company, is planning an initial public offering (IPO) with an offer size of approximately $US5.5 billion ($7.9 billion). The company intends to allocate about half of these shares, roughly $US2.75 billion, to a select group of its existing investors. This allocation strategy comes as indications of interest from investors have significantly surpassed the total offer size. The IPO is positioned as one of the largest in Australia. Fund managers received an update on this allocation plan via a book update on Monday morning.

The strong demand for Firmus's IPO, exceeding the offer size and leading to a significant allocation for existing backers, signals robust investor appetite for AI infrastructure plays. This could encourage other companies in the sector to pursue public offerings, potentially increasing competition and innovation. The focus on AI infrastructure highlights a key growth area within technology, attracting capital that might otherwise flow to different tech sub-sectors.

Existing investors in Firmus are likely to benefit from preferential treatment, potentially securing shares at the IPO price before a wider market can access them. This practice can also lead to a more concentrated initial shareholder base, which might influence the company's governance and strategic direction post-IPO. Investors looking to gain exposure to AI infrastructure will need to monitor secondary market performance closely if they miss out on the initial allocation.