- IPOs grew by 60 percent, the issue volume close to 70 percent, year-on-year
- A total of 13 Swiss companies went public, five of them on a Swiss stock exchange; first SPAC listing in Switzerland imminent
- The IPOs expected to come to market in 2022 include IPOs of young companies and corporate spin-offs
The global IPO market continues to grow in the fourth quarter of 2021: 621 companies went public worldwide between October and December - an increase of 16 percent year-on-year. The issue volume grew by nine percent year-on-year, to a total of 112 billion US dollars. The positive trend that began to emerge in the previous quarters is continuing.
The number of new IPOs (2,388 in total; +64 per cent) and global issue volume (+67 per cent, and a total of USD 453 billion), marked a new worldwide record this year. According to EY Switzerland’s latest IPO Barometer, 2021 was thus the strongest year for IPOs worldwide since 2000, both in terms of number and issue volume.
According to Tobias Meyer, Head of Transaction Accounting and IPO Services at EY Switzerland, “2021 was a strong year for IPOs. Although the coronavirus pandemic repeatedly wreaked havoc and uncertainty on the financial markets, investors worldwide nevertheless remained optimistic. Bottom line: volatility was limited, and there was no major economic downturn.”
Switzerland: companies preferred IPO abroad
- 13 Swiss companies in total went public in 2021, with an aggregate issue volume of 3.7 billion Swiss francs (almost 4 billion US dollars). Five thereof went public on the Swiss stock exchange, the remaining eight abroad. Five alone listed on the NASDAQ, the US technology stock exchange. By comparison, 2020 saw the IPOs of merely three Swiss companies (in- and outside of the country), with an aggregate issue volume of 360 million Swiss francs (390 million US dollars).
- Four out of the five companies that went public completed their IPO on the SIX Swiss Exchange; the other one was listed on BX Swiss, the Bern Stock Exchange, totaling a volume of roughly two billion Swiss francs (2.1 billion US dollars). This marks a sharp contrast to the previous year that saw only two companies going public in Switzerland, and the aggregate issue volume merely reaching 116 million Swiss francs (122 million US dollars).
- Here are the names of the five Swiss companies listed on a Swiss stock exchange in 2021: PolyPeptide (848 million Swiss francs), Montana Aerospace (506 million Swiss francs), Medmix (315 million Swiss francs), Skan Group (formerly BV-Holding, 270 million Swiss francs) and Kursaal Bern AG (15 million Swiss francs).
- The eight Swiss companies that decided to go public on a foreign exchange in 2021 are: On (858 million US dollars), Sportradar (513 million US dollars), Sophia Genetics (243 million US dollars), VectivBio (147 million US dollars), Molecular Partners (64 million US dollars), Astrocast (52 million US dollars), NLS Pharmaceutics (23 million US dollars) and ID Entity (3 million US dollars).
- In November 2021, the SIX Swiss Exchange approved the listing of special purpose acquisition companies (SPACs), thus allowing a Swiss SPAC to go public this, for the very first time.
“In retrospect, 2021 was a successful year for IPOs, from the perspective of the Swiss business and financial industry. It is certainly striking to see a number of Swiss life science companies choosing to be listed abroad this year, where venture capital is often more readily available than in Switzerland. Overall, Switzerland will have the fifth-highest number of domestic companies going public abroad, in 2021, after China, Israel, the UK and the US,” concludes Tobias Meyer with EY Switzerland.
Double the number of IPOs in Europe, strong US market
- Europe saw the strongest IPO growth in 2021: The number of IPOs on European stock exchanges more than doubled year-on-year (from 191 to 485), the issue volume almost tripled, growing from 27.5 to 81.1 billion US dollars.
- On the other hand, China (including Hong Kong) registered once again the biggest number of IPOs: a total of 593 companies (+11 per cent year-on-year). The issue volume grew by three percent to a total of 122.8 billion US dollars.
- The US market performed well, overall. The number of IPOs on US exchanges reached 416 (+86 percent); the issue volume generated grew by 81 percent (to a total of 155.7 billion US dollars).
Tech companies lead the IPO market
Investors were particularly interested in technology companies. This sector accounted for 611 IPOs and an aggregated volume of 147 US dollars in 2021, and will have generated 26 percent of IPOs worldwide, as well as 33 percent of aggregate issue volume, in the same year.
This year’s largest IPOs largely reflect this trend. The ten biggest IPOs either involve technology sector companies or have a strong technology focus: Rivian Automotive, an electric car manufacturer (US; revenues of 13.7 billion US dollars), China Telecom, a telecoms company (China; 7.4 billion US dollars), Kuaishou Technology, a provider of technology services (China; 6.2 billion US dollars), Coupang (South Korea; 4.6 billion US dollars) and Didi Global (China; 4.4 billion US dollars), InPost, a postal company (Poland; 3.9 billion US dollars), Krafton, a technology company (South Korea; 3.8 billion US dollars), JD Logistics , a logistics company (China; 3.6 billion US dollars), China Three Gorges Renewables, an energy company (China; 3.5 billion US dollars) and BeiGene, a healthcare company (China; 3.3 billion US dollars).
Tobias Meyer, IPO expert with EY Switzerland, thinks the economic changes that amplified with the COVID-19 pandemic have a great impact on this technology boom: “This pandemic clearly accelerated the digital transformation of the economy. Moreover, the willingness to put established business models to the test and to introduce radical measures to ensure the future viability and agility of companies has risen sharply. This, in turn, leads to a steady influx of newcomers and has contributed to the investment community’s big interest in tech companies.”
Growing number of SPAC IPOs in Europe
A total of 646 SPAC transactions (+136 percent year-on-year) were listed worldwide, generating an aggregate issue volume of 161 billion US dollars (+97 percent). The US accounted for 587 (91 percent) thereof, this year, Asia for 20, and Europe saw 39 SPAC IPOs. Tobias Meyer: “SPACs have been primarily a US phenomenon, but Europe seems very interested, as well. As a result, the number of SPAC IPOs grew, from 20 in 2020, to 39 this year.”
2022 also expected to be a good IPO year
“Investor interest in attractive opportunities remains high, given the persistently low interest rates. Furthermore, companies have learned to deal with the pandemic, and are thus better equipped to cope with the effects of COVID-19 or any new variant, than they were two years ago. Moreover, there is still an abundance of capital on the market to be invested. We therefore expect a series of IPOs in 2022, e.g. by young companies, as a result of corporate spin-offs or via mergers with SPACs,” says Tobias Meyer.
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