The IPO proceeds are earmarked for funding GYG’s growth strategy. Credit: Nicholas Cappello on Unsplash

Mexican-themed restaurant chain Guzman y Gomez (GYG) has debuted on the Australian Stock Exchange with its shares closing at $30, a significant rise of more than 36% from the $22 issue price.

The initial public offering (IPO) raised $335.1m, propelling the company’s market capitalisation to $3bn.

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Reuters reported that the surge in GYG’s share price is a positive indicator of broader market sentiment, which has been dampened by high interest rates and inflation throughout 2022 and 2023.

Now trading under the GYG ticker, the Sydney-based company announced its IPO in May 2024 with an initial offer size of 11.1 million shares, aiming for a valuation of $2.2bn.

The offering was later increased to 15.3 million shares, with Barrenjoey Markets and Morgan Stanley Australia serving as joint lead managers for the offering.

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According to Bloomberg, GYG’s $335.1m float is the largest in Australia since the chemical distributor Redox’s offering in July 2023 and is one of only four offerings above $100m since 2022.

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The IPO proceeds are earmarked for funding GYG’s growth strategy, which is primarily focused on expanding its corporate restaurant network within Australia. Since opening its first restaurant in Sydney in 2006, GYG has grown to 210 restaurants across four countries, including 185 in Australia.

In May, GYG co-CEO Hilton Brett commented on the company’s growth prospects, stating, “We expect our sales growth to continue through the opening of new restaurants and increasing sales in existing restaurants. We also expect our profitability to improve as we continue to improve our execution in restaurants and we further leverage the benefits of our increasing scale. As a result, we expect pro forma EBITDA [earnings before interest, taxation, depreciation and amortisation] to grow from $29.3m in the financial year 2023 [FY23] to $59.9m in FY25.”