Record-breaking IPO activity up to Q3 is highest in 20 years
Listing activity on the London markets has maintained momentum witnessed during the first half of the year with a record-breaking quarterly performance on both the Main Market and Alternative Investment Market (AIM), according to EY 's IPO Eye report.
An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance, allowing a company to raise capital from public investors.
Funds raised in the first nine months of the year totalled £13.4bn, exceeding the total IPO proceeds of £9.3bn generated in 2020.
The Main Market hosted 14 IPOs in Q3 raising £2.9bn, with a further 19 companies admitted to AIM and raising £1.1bn.
The financial services and healthcare sectors have contributed the largest IPOs in the quarter. The Main Market also saw the £8bn direct listing of major technology company, Wise plc, signalling a vote of confidence in the UK market by the tech sector.
AIM activity in the third quarter of the year returned to historical quarterly levels, helped by its biggest ever listing, Revolution Beauty Group plc raising £300m and being admitted to trading with a market capitalisation of £495m.
Cross-border listing activity has continued, with eight international issuers seeking to list in London in the first nine months of the year. Whilst the UK has retained its position as the leading European IPO venue by funds raised, globally it is third place behind the US and China.
It has also been a strong quarter for follow on fundraising by existing issuers with over £8bn being raised in the quarter, with over £21bn of equity capital being raised in London year-to-date.
Dan Salt (pictured), leader of the M&A team in Birmingham, said: “The UK markets continue to witness record-breaking IPO activity, with both the Main Market and AIM already generating higher IPO proceeds this year than for the whole of 2020.
“Looking ahead, we expect deal volumes to continue to be strong through the remainder of 2021 as the economy maintains momentum after reopening post-pandemic albeit with a degree of tension as a result of supply chain issues and the reduction in COVID-19 Government stimulus packages. ”
Global equity markets have also had another busy quarter, with $106bn being raised in 547 deals across the globe, making this the best nine-month listing performance for over 20 years.
From a sector perspective, technology, healthcare and industrials once again rose to the top of the pack retaining their firm grasp on investor attention.
For the fifth consecutive quarter since Q3 2020, technology generated the highest year-to-date number of deals (419), raising the highest amount in proceeds for the sixth consecutive quarter, from Q2 2020 (US$116.4bn).
Healthcare followed with 287 IPOs raising US$49.2bn by proceeds, and industrials came in third with 204 IPOs raising US$35.3bn by proceeds.
Helen Pratten, Strategy and Transactions Partner said: “Activity on Global markets continues to be very strong, with record levels of proceeds generated so far this year.
“Global growth has been driven by the pick-up of activity in EMEIA, which has experienced significant growth and increased its share of global IPO deals so far this year. There remains a very healthy pipeline and IPO windows remain open. IPO candidates should continue to focus now on readiness activities to ensure they have the right talent and IPO resources in place, whilst continuing to be aware of alternative financing routes. ”