Beforepay (ASX:B4P) shares close 44% down on ASX debut

Highlights

B4P shares dip in red on ASX debut dive below 40% in a day’s trade.

Beforepay has reported a strong December quarter and growth across key metrics.

Beforepay had raised AU$35 million in its IPO.

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The pay on-demand business, Beforepay Group Limited’s (ASX:B4P) shares are bleeding in red on their debut day on ASX. B4P share price has closed over 44% today. The newly listed shares have seen tremendous selling volumes today and have dipped despite a strong December quarter.

Beforepay’s business

Beforepay lends its customers a part of their pay cheques for a service fee before their payday.
The company had managed to raise AU$35 million in its IPO.
Its December quarter, performance update, has shown growth across key metrics, however, the company has also disclosed uncertainty over its future default rate.
On a positive note, the default percentage on Beforepay lending had halved over the years.
The shared performance numbers reflect the rapidly growing demand for pay-on-demand services in Australia and the changing consumer behaviour.
According to Beforepay, the default rate were to increase with the end of the holiday period, majorly due to higher average loans and new-user additions.
Beforepay will release its half-yearly interim results for the period ending 31 December 2021 by the end of February, which would further clarify the default rate predictions.

Bottom line-

Even after posting good growth numbers, Beforepay shares could not gain much confidence from ASX investors on its first trade day. The uncertainty related to the future default rate seems to have taken over the investor sentiments, making the share bleed on debut.