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Pedestrians are seen at the intersection of King and Bay streets in the heart of Toronto’s financial district.Kevin Van Paassen/The Globe and Mail

They aren't Alibaba Group or Weibo Corp., the huge initial public offerings soon to come to U.S. markets, but a building wave of Canadian IPOs signals confidence that Canadian investors are ready to embrace more risk.

Two significant IPOs have been filed in Canada in the past two weeks.

As reported by The Globe and Mail, Catalyst Capital Group wants to take public its Callidus Capital Corp. lending business with the goal of raising as much as $200-million. The money will be used to expand Callidus's loan book. The deal would suggest an equity valuation of $600-million for all of Callidus.

LED-lighting maker Lumenpulse Lighting is seeking to raise $75-million in an IPO slated for early April. That would value the company at about $300-million.

In behind those two companies are a long list of expected technology industry debuts, which have been well publicized, including Vision Critical Communications Inc. and Desire2Learn Inc.

Canaccord Genuity has forecast that Canadian technology company IPOs this year are likely to raise $400-million, according to Bloomberg.

And bankers say that they have more to come should the market hold up.

A common thread here is that none of these are the types of initial public offerings that have been the go-to in Canadian markets in recent years. Last year, eight of the top 15 IPOs were real estate investment trusts. A handful more had dividend-first policies. And most of the rest were in energy. In other words, there were a lot of new stocks that looked a lot like the old stocks already on the Toronto Stock Exchange.

In this current list of candidates, there are no real estate investment trusts, and it is not a list replete with low-risk high-dividend companies designed to appeal to the income-centric crowd. Lumenpulse won't pay a dividend. The technology stars in the hopper are not likely to do so either. And while Callidus does expect to pay a dividend, it is not an easy-to-understand company in a traditionally low-risk sector. It is a growing company in the business of lending to companies that banks won't touch, where there are risks of loans going bad.

These are growth companies. They are risky by nature, and the fact that there is confidence that the market will embrace them without having to fall back on a safety-first dividend model suggests that the Canadian markets have turned a corner.

Montreal-based Lumenpulse is only eight years old. It makes 80 LED products, and resells more made by other countries. It wants to use $10-million of IPO proceeds to increase its distribution and sales network and to increase the visibility of the company's name. It wants $7-million to develop new products, and a good (but unspecified) chunk of the rest for acquisitions.

Lumenpulse has been growing its revenue from the products it makes at a compound annual rate of 78 per cent since 2011. Buying Lumenpulse is a bet on the idea that LED lighting will replace traditional incandescent and florescent fixtures, with some forecasts that LEDs will go from one in 10 lights to six in 10. It's also a bet that Lumenpulse is going to be a player in that changeover.

Investors are still showing lots of love for traditional favourites. A stock sale Monday by Whitecap Resources Inc. to finance an acquisition was a huge winner – especially when coupled with a planned dividend increase. Whitecap's bankers set out to sell $500-million of subscription receipts. Marketing started about 7 a.m. Toronto time. By 9 a.m., still half an hour before markets opened, there were orders for $1-billion. By day's end, signs pointed to a deal that was likely even more oversubscribed, as institutional investors reported getting only about 20 per cent of the stock they requested. So it's not like energy or dividends are out of favour. It's just that the appetite is wider than in recent years, a sign of health.

Given that Canadian markets in recent years have become dominated by banks, commodities and real estate stocks, seeing a list of promising IPO candidates from a range of other businesses is heartening – it suggests a broadening of what's out there for investors to buy. It also means investors will have to be choosy and careful.

However, after years of having the Canadian markets depopulated through takeovers and falls from grace, a crop of newcomers is very welcome.

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