The global IPO market suffered a sharp slowdown this year, with activity tailing off from a record-breaking 2021 as market uncertainty took its toll.
With 1,333 IPOs raising $179.5bn, IPO activity dipped 45% and 61% by number of deals and proceeds respectively, year-over-year, according to data from EY.
The accountancy giant said that companies have been hesitant to come to the market with equity offerings generally, and a reset in corporate valuations has also discouraged companies from pursuing public listings.
IPO activity in the Americas plummeted to lows not seen since the peak of the Great Recession, hitting a 13-year low by volume and a 20-year low by value as markets were rocked by volatility and policies undertaken to combat inflation.
Both the number of IPOs and proceeds plunged, with 130 deals raising $9bn, down 76% and 95%, respectively year-on-year.
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While the energy supply shock has spurred inflation, with Europe being hit the hardest, it has also created a more favourable IPO window for the energy companies to go public, boosting IPO activities in the Middle East, China and some ASEAN countries.
The Asia-Pacific IPO market had 845 IPOs with $120.6bn in proceeds, taking the smallest hit from the global economic downturn and geopolitical tensions, and accounting for 63% of deals and 67% of funds raised globally in 2022.
Mainland China is on course to set another record in the highest annual capital raising by the close of 2022.
Emeia IPO activity slid by 53% and 55% by number and proceeds respectively, recording 358 IPOs raising $49.9bn.
But looking ahead to 2023, there is a strong IPO pipeline on the horizon, according to EY.
Paul Go, EY global IPO leader, said: “As pipeline continues to build, many companies are waiting for the right time to revive their IPO plans. Still, with tightening market liquidity, investors are more risk-averse and favour companies that can demonstrate resilient business models in profitability and cash flows, while clearly articulating their ESG agendas.”
This article was published by Financial News’ sister title Private Equity News
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