While Q1 2021 was dominated by special purpose acquisition company (SPAC) IPOs, traditional IPOs stepped back into the spotlight in Q2 helped by a number of factors, including ample liquidity in the financial systems and strong global equity market performance, among others.
The positive performance of the global IPO market is good news indicating global economic recovery is well underway, although the pace of recovery varies across markets.
A steady pipeline of US$1b+ IPOs is expected through 2021 including tech unicorns, SPACs and companies in sectors that have already proved resilient despite the COVID-19 pandemic. On the flip side, 2H 2021 may prove challenging as the lingering impacts of the COVID-19 pandemic continues to affect companies in sectors most impacted by the lockdowns like traditional retail, travel, tourism and hospitality. If these sectors fail to recover, global markets will continue to fall short of a full global economic recovery.
Those still looking to go public in 2021 should be well-prepared with a realistic vision of valuations while making certain to have an environmental, social and governance (ESG) strategy in place.