The latest IPO snapshot from PwC in the UK;
The proceeds raised from European IPOs in 2023 fell by more than a third (35%) compared to the previous year with global macroeconomic and geopolitical uncertainty contributing to a soft market according to PwC’s latest IPO Watch.
There were 107 IPOs across Europe raising €10.2bn in 2023, a fall of €5.4bn on the previous year which saw €15.6bn raised from 102 IPOs. The last quarter saw €1.7bn raised from 28 IPOs across Europe. The largest listings include the €1.9bn IPO of the Romanian electricity producer, Hidroelectrica, the €935m IPO of the German medical packaging company, SCHOTT Pharma, and the €605m IPO of the German green hydrogen solutions provider, Thyssenkrupp Nucera. The €507m Special Purpose Acquisition Company (SPAC) IPO of Admiral Acquisition on the London Stock Exchange made the top five IPOs in Europe for 2023.
Stronger than expected equity markets and reduced volatility have created a supportive environment for follow-on equity issuance, which showed resilience during 2023, with proceeds increasing by €6.4bn (8.7%).
The UK has been the most active market for secondary issuance this year in Europe, raising a total of €20.3bn and contributing 25% of total proceeds.
There is renewed optimism about potential recovery of the European IPO market as we head into 2024, which is supported by improving macroeconomic sentiment, growth in equity indices and reduced volatility, together with a growing demand for exits and a healthy pipeline of issuers. Given the general market uncertainty, IPO windows are expected to be tight – planning for optionality and being prepared to take advantage of these tight windows will be key for prospective issuers.
THE LONDON BEAT
Despite an active follow-on market in London, it only saw 11 IPOs raising £878m in 2023 as macroeconomic sentiment weighed on new issuance. However, according to the latest PwC economic outlook for 2024, the UK economy is expected to recover from the difficult post pandemic years. And while there remain factors that can change the direction of travel, the overall outlook is more positive for 2024 than was expected twelve months ago.
In addition, in December 2023, the UK’s securities regulator, the FCA, published its detailed Primary Markets Effectiveness proposals following extensive consultation through 2023. The plan is that the new UK listing regime will be in place in the second half of 2024. These changes are designed to make a listing in London more attractive and add to a more positive outlook for capital markets.
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