SYDNEY, June 20 (Reuters) - After two years in deep

freeze, Australian investors will be looking for signs the

initial public offerings market is thawing as fast-growing

Mexican restaurant chain Guzman Y Gomez serves up the country's

biggest IPO in 11 months.

The Sydney startup puts up A$335.1 million ($223.4

million)of new stock, about one-sixth of the company, for

trading on Thursday.

In its listing prospectus, the company forecast a second

consecutive net loss for 2024 but a profit in 2025 and hopes

investors back its plans to match the current Australian store

count of McDonald's in 20 years.

Guzman Y Gomez's (GYG) initial issue was closed to the

public and largely involved selling shares to existing

financiers and franchise owners. How the shares perform will

send a signal about broader sentiment after high interest rates

and inflation squashed demand through 2022 and 2023.

Australian listings collapsed after a record 2021 as

pandemic stimulus payments ended and the central bank raised

interest rates to slow inflation. In 2024 so far, Australia has

raised just A$98 million in IPOs, the second-lowest June half in

more than a decade, according to LSEG data.

"Guzman Y Gomez will be a bit of a bellwether," said

Campbell Welch, an adviser at Novus Capital who ran a small IPO

for health services provider Freedom Care in November,

one of 32 new listings in the country in 2023, compared with

nearly 200 in 2021.

"It's still pretty tough to raise money but some of these

things look like they're resolving themselves. I don't see why

it can't succeed."

A prospectus filed in May generated rolling headlines about

GYG's target of opening at least 30 stores per year from 183 in

Australia currently - a rate it has achieved just once, in 2023

- and about its omission of store lease liabilities and

share-based payments from earnings projections.

The company said its accounting treatment of expenses

was typical of franchise businesses.

"Once we're listed, the market will price us every day and

our focus will be on the things we can control: selling burritos

and delivering on our strategy," GYG founder and co-CEO Steven

Marks said in a statement.

A Morningstar client note valued the stock at A$15 a share,

below its A$22 issue price, saying the company with 3.5% of the

country's fast food market had not established a competitive

advantage which would justify its rapid expansion.

Without that advantage "we are hesitant to fully bake in

management's 1,000-store long-term projection", Morningstar

analyst Johannes Faul wrote.

"The restaurant space is highly competitive. Switching costs

are nonexistent for patrons and barriers to entry are relatively

low."

Sebastian Evans, chief investment officer at NAOS Asset

Management, said GYG's small share register and ambitious growth

narrative may support the stock given its familiarity with

Australians.

"We will follow the business and have done so for some time,

but we believe the significant ramp-up in store rollout and the

proposed geographic split of these new stores adds to the amount

of execution risk," Evans said.

Emanuel Datt, principal of investment manager Datt Capital,

said the fact GYG considered a private sale before choosing a

listing - as reported by Australian media - indicates "public

markets may be falling back into favour."

($1 = 1.4997 Australian dollars)