European IPO activity set to pick up after quiet Q3 due to elections and regulatory changes

• Q3 sees first fall in European IPO activity this year, however year-to-date issuance remains up on 2023

• One notable IPO launched in London in September as well as three significant IPOs in Europe with one already priced and others expected to list in in Q4

• Across EMEA proceeds fell in Q3 but overall year-to-date proceeds are up by 31% compared to the same period in 2023

• IPO activity is now being geared towards 2025

The proceeds raised from European IPOs in the third quarter (Q3) of 2024 fell by 92% compared to the same period last year marking it as the first this year to see a fall in IPO activity according to figures from PwC’s latest IPO Watch EMEA. Numerous elections across the region including in the UK, France and EU are believed to have caused companies to delay their listings. 

Overall, Europe saw 8 IPOs raising €0.3bn, a decrease of €3.3bn compared to the same period last year and a fall of €6.3bn compared to the previous quarter. However, year-to-date, European IPO proceeds are still outperforming last year with €11.8bn raised compared to €6.1bn at the same point in 2023. 

Despite the quieter quarter in Europe three significant IPOs launched in September including the IPO of Springer Nature in Frankfurt (priced early October), Europastry on the Madrid Stock Exchange and the Zabka IPO in Poland. Reform of the EU Prospectus Regulations is back on the agenda in Europe with the same aim as the UK’s Primary Markets Effectiveness Review (PME) - to make Europe’s capital markets a more attractive venue by simplifying the regulations and increasing liquidity.

The London IPO market and new Listing Rules
IPO activity in the London market for Q3 saw £50m proceeds raised from financial services company Rosebank Industries which enjoyed impressive aftermarket performance with shares trading up 145% post IPO. One Main Market IPO is currently live and with Raspberry Pi, which listed in the previous quarter having its shares trading up 38% post listing, the sentiment and momentum around the UK market remains positive.

The Financial Conduct Authority’s (FCA) new Listing Rules came into effect on the 29th July and represent a change in the UK’s capital markets regulatory regime. For private businesses contemplating IPOs, the eligibility requirements are more flexible and seek to allow companies access to the capital markets at an earlier stage.

The Middle East and African IPO markets
IPO activity in the Middle East delivered $1.7bn of issuance from 18 IPOs in the third quarter including the second largest IPO globally, the $876m listing of NMDC energy. While the IPO pipeline in the Middle East remains robust, with notable ongoing diversification away from the energy sector, investors will be closely monitoring the broader macroeconomic and geopolitical environment, particularly the trajectory of oil prices. In Africa, July saw the first IPO for the region in 2024, with telecoms company Emtel listing in Mauritius raising $55m.

The Global IPO market
Despite the summer months normally seeing a lull in activity, global IPO proceeds are down 32% in Q3 2024 at $22.4bn compared to the same period last year which saw $33.1bn raised. The decline is attributed to an over 80% reduction in IPO proceeds raised in China with the region continuing to experience macroeconomic headwinds and uncertainty. This quarter, out of the top five global IPOs, the largest - real estate company Lineage, took place on the Nasdaq raising $4.4bn.

Kat Kravtsov, Capital Markets Director at PwC UK, said:

“After a period of short-term volatility over the summer that saw a number of IPOs postponed, mainly due to the macroeconomic headwinds and multiple elections around the world with the US still to come, capital market conditions have since started to stabilise. 

“Whilst the EMEA IPO market has seen a few transactions launching in September, the remainder of 2024 is expected to be relatively quiet with activity expected to pick up in 2025. Notably, early preparation and IPO readiness remains front of mind as there is a significant backlog of private equity exits and corporates that are looking to access the market next year.”

Vhernie Manickavasagar, Capital Markets Partner at PwC UK, added,

“Despite a quiet summer, the IPO market is currently being tested by a few large IPOs in Europe, three of which are private equity-backed, demonstrating continued sponsor appetite for IPOs. With a backdrop of stabilising equity capital markets and a significant backlog of maturing PE-backed investments, we expect to see increased IPO and follow-on equity issuance activity from the sponsors in 2025. The focus will be on achievable valuations and post-IPO performance

“The UK capital markets has also witnessed a generational change with new listing rules now in place designed to attract more companies to IPO in London. The impressive aftermarket performance of Raspberry Pi and Rosebank Industries coupled with a few further IPOs, including Applied Nutrition, expected to test the market in 2024 should instil confidence in the growing IPO pipeline targeting 2025.”

Debt capital market update
According to the European Central Bank (ECB), in the third quarter of 2024, the investment grade corporate bond market in Europe saw an issuance volume of approximately €150bn, reflecting a year-to-date increase of 5% compared to the same period in 2023. Attractive yields for investors and stable interest rates have buoyed the bond markets over the quarter. September showed strong volume and activity as the markets returned from the summer hiatus.

The high-yield bond market in Europe has also been notably active, although spreads have widened slightly due to concerns ​over corporate debt sustainability and potential defaults. Globally, macroeconomic factors such as supply chain disruptions and oil price volatility have also influenced corporate bond markets, contributing to a complex landscape for both investors ​and issuers.

Commenting on the debt capital market, Sarah Hitchen, Partner and Capital Markets Leader at PwC UK, said:

“Greater interest rate stability has seen a return to volumes across the debt markets in the third quarter. However, we have seen the yields on European investment grade bonds rising, which was influenced by persistent inflationary pressures and cautious monetary policies by the ECB.”

Ends

Notes to editors

The data in this report is based on data extracted from Capital IQ on 1st October 2024 and based on their offering date between 1st January 2024 and 30th September 2024 and excludes greenshoe.

Only transactions with a minimum of $5m money raised have been included, the data excludes Closed-End Funds and Business Development companies and transactions Over-The-Counter exchanges. In case IPOs take place on two or more exchanges, the full amount of money raised is attributed to all exchanges. Industry classification is based on Capital IQ Primary sectors.

The market data from IPO Watch EMEA is derived from the data provided under Licence by S&P Global Market Intelligence LLC, Inc. The data has not been independently verified by PwC.

Report can be found here:

EMEA IPO Watch:
https://www.pwc.co.uk/services/audit/insights/ipo-watch-emea.html