Investors hoping for a slice of the buoyant dairy market are disappointed by the decision of the milk company Synlait to defer plans to float its production arm on the stock market.
It's understood the Canterbury-based firm had wanted to raise about $165 million to double its its milk processing capacity.
Synlait's decision to delay its plans for an initial public offering is a blow to the stock market, not least because it gave investors the chance to invest in the buoyant dairy market, a sector under-represented on the NZX.
The company had the support of large institutional investors, but says smaller investors did not share their enthusiasm, which has stymied its plans for the moment.
It's understood an indicative price of about $1.60 a share may have deterred small investors used to paying less than $1 a share for recent capital raisings, such as PGG Wrightson, Pyne Gould Corporation, Nuplex and Fisher and Paykel Appliances.
There are also questions over whether the broking community got behind the float to broaden its appeal to smaller investors, with First NZ Capital being the sole lead manager.
Investor fatigue may be setting in, as they also consider debt raisings from firms like Kiwi Income Property Trust and Goodman Property Trust.
The sharemarket has seen a burst of share floats and capital raisings in recent times, as firms tap investors for money to expand and to bolster their financial positions.
Kathmandu, BioVittoria and DNZ Property Fund have listed, or have indicated they will do so, ending a drought of initial public offerings that went back to late 2007.
Synlait accounts for about 1% the country's dairy production. It had planned to offer shares in subsidiary Synlait Milk, to fund the building of a second production facility at its existing site in Canterbury.
The company will consider its options next year, and has indicated it may raise money from its existing shareholders such as Japanese firm Mitsui, as well as a private placement to certain investors.
Analysts expect Synlait to come back to the share market at some stage early next year.