Quarterly survey tracking the volume and value of IPOs on Europe's main stock exchanges.
European IPO proceeds raised in H1 2022
Volume of IPOs in H1 2022 across Europe
Further Offers proceeds raised in H1 2022 in Europe
After a challenging first quarter, European IPO sentiment continued to deteriorate with turbulent equity capital markets and worsening global macroeconomic backdrop. As a result, the IPO market was largely closed for most issuers in Europe with Q2 and H1 IPO values reaching a ten-year low. Whilst we continue to see companies preparing to go public and there will be some limited attempts to tap the market in H2 2022, it is expected that the broader pipeline will likely be pushed back into next year.
Second quarter has seen another sharp sell off in equities as market conditions deteriorated further with rising interest rates, soaring inflation and slowing growth, exacerbated by the war in Ukraine and lockdowns in China. In light of growing recession expectations, equity markets have taken a hit with major indices nearly erasing their last year’s gains in the first half of 2022, with the exception of the energy and commodity heavy FTSE 100. However, many market participants see this equities re-rating as a necessary valuation reset. IPO activity was also impacted by volatile market conditions as VSTOXX index remained at elevated levels throughout the quarter. Volatility will need to drop closer to 20 for the IPO market to reopen.
Q2 2022 IPO issuance in Europe totalled €2.1bn from 29 IPOs compared to €23.1bn from 142 IPOs in Q2 2021. With this backdrop of high volatility and challenging IPO market conditions, a longer period of pre-marketing and investor education together with cornerstone support was necessary to get some deals over the line.
The Industrie de Nora IPO, which had around 40% of the transaction taken by cornerstone investors and extended pre-marketing, is a good example of how issuers in attractive sectors and strong equity stories can still access the market despite the very tough market backdrop.
The London IPO market was largely closed in Q2 with only 3 IPOs raising £0.2bn compared to 20 IPOs raising £2.6bn in Q2 2021. Financials Acquisition Corp SPAC, targeting tech-enabled insurers, was the largest IPO on the LSE in Q2 this year raising £150m. The AIM market saw only 1 IPO this quarter being the £6m IPO of EnSilica.