Global IPO activity has fallen sharply in Q3 2011, according to our report Global IPO trends 2011.
A total of 284 deals raised US$28.5b (€21.0b), a fall of approximately 26% in number and 57% in capital raised compared with Q2 2011.
Mark Heesen, president of the National Venture Capital Association says, “While the IPO market has screeched to a halt this quarter, the acquisitions market has continued to move forward. Current economic instability could reduce the number of high return acquisitions while keeping new IPOs at a seriously low level for the rest of the year.”
Current market uncertainty caused by the Eurozone crisis has made investors more selective and risk averse. Equity investments in renewable energy infrastructure have been very disappointing. In particular, we have seen the solar industry slump, but there is hope that recovery might occur as tumbling valuations will likely spur investor demand.
Mainstream Renewable Power could seek an IPO within two years, according to one of the company's co-founders. It is a fast-expanding renewable energy project developer with an interest in wind and solar across the world. It is considering a listing in Hong Kong, which would be important in gaining greater access to the rapidly growing Chinese market.
PGE Energia Odnawialna (PGE EO), the renewable branch of Polish power company PGE, has suspended its €250m IPO on the Polish Stock Exchange, originally scheduled for October, because of “uncertain market conditions”.
Asia Pacific solar companies have featured strongly in the IPO arena this quarter.
China’s stock markets have been struggling this year but the renewable energy sector has still managed to attract strong investor interest. Beijing-based solar equipment manufacturer Beijing Jingyuntong Technology Co Ltd has raised CNY2.52b (€0.29b) via an IPO on the Shanghai Stock Exchange, almost three times its initial target of CNY900m (€103m). Jingyuntong sold 60m shares in the IPO and money raised will be used to finance the first phase of developing a silicon industrial park in Beijing.
In southern China, Jiangsu Akcome Solar Science & Technology Co Ltd, a solar PV modules manufacturer, has raised CNY800m (€92m) in an IPO on the Shenzhen Stock Exchange. It issued 50m shares at CNY16/share (€2/share) in August and will use the money to construct PV cell border and junction box manufacturing lines.
In October, the Seoul-based company Nexolon Co Ltd raised KRW85.5b (€0.1b) via an IPO on the Korean SE Stock Exchange after selling 21.4m shares for KRW4000/share (€2.4/share). It will use proceeds to build a factory and purchase equipment to boost annual output capacity.
In the US several IPOs were put on hold. The market was not helped by volatility and news that several publically listed companies, like First Solar and SunPower, missed profit forecasts.
Sinohydro Group Ltd, which built China’s Three Gorges Dam, raised CNY13.5b (€1.6b) through an IPO, selling three billion shares at CNY4.5-CNY4.8 (€0.5- €0.6) each. Proceeds will be used to purchase equipment and fund clean energy projects, including one in Cambodia.
This is a sample of the main global IPO transactions in the renewables sector over the past quarter.
Sources: All information relating to IPO activity in the sector is obtained from publicly available sources.