I haven’t been able to find this video. You quote Shamgar...

I haven’t been able to find this video. You quote Shamgar saying “the exact amount of shares LFS are issuing is the exact amount LFS needed to get liquidity and be included in an index, so deal more important to LFS”. Did Shamgar provide more detail? No doubt LFS seeks liquidity, and hence is very keen to issue many more shares to a wide investor base: the proposed dispersion of new LFS shares through to the HUM shareholder base is a smart ploy, and HCF offers LFS a big help on this point. However, the matter of liquidity and index inclusion is chicken and egg: each promotes the other, but the converse also applies. The ASX/S&P guidance on this is explicit and includes “LIQUIDITY: only stocks that are [i.e. already have been] actively and regularly traded are considered for inclusion in any S&P/ASX index” and “FREE FLOAT: a minimum free float threshold of 30% exists for a stock to warrant inclusion in the S&P/ASX indices.”

It’s curious that the ASX declared that, upon the IPO, the free float was 33%. That was everything except the direct 66.4% holding of the 3 PE investors, and included as free float the affiliated funds on whose behalf PE managed 14% LFS further holdings. That “free float” also included the 10% holding of Shinseki Bank which is likely to be a very long-term holder (perhaps the only one), and not a supplier of liquidity. SB has in fact just increased its LFS holding. In any case, irrespective of the size of free float, the tougher test is actual liquidity. Total LFS volumes traded were 10.77m in CY22 to date and 31.9m in CY21 = 1.04% and 3.1% of total on issue, respectively. I doubt that that is anywhere near enough to meet ASX300 liquidity requirements, irrespective of the size of the free float. On March 21, 2022 LFS was added to the All Ordinaries, but NOT into the ASX S&P300. The 66% held by the PE consortium JV vehicle will be completely out of escrow by 31 August, but the share price today is 30% below the $2.60 IPO price- and even a partial sell-down by the 66% holder would knock the price even more. The price risk also exits with the 150m LFS shares that will end up in the hands of HUM shareholders, but their eventual sales would be smaller and more gradual than say a 15-20% slab from the dominant PE shareholder, and perhaps a fair chunk of those shares would be retained by HUM shareholders, not put into the market. Despite its self confidence, LFS has a major problem: it has more sellers than buyers.