How do you prepare now for the moment your IPO is ready to take flight?
How do you prepare now for the moment your IPO is ready to take flight?

How do you prepare now for the moment your IPO is ready to take flight?

In Q2 2023, emerging markets are thriving amid a slow global IPO market.

In brief

  • In the first half of 2023, global IPO volumes fell 5%, with proceeds down 36% YOY.
  • The US had its largest offering since November 2021.
  • Asia-Pacific continues to dominate with an approximate 60% share of global IPOs.

The first half of 2023 recorded 615 IPOs with US$60.9b capital raised, a 5% and 36% decrease year-over-year (YOY) respectively. Larger deals came to the market in Q2 compared to Q1, and the gap has narrowed, even though it has been a slow recovery. These modest results reflect slower global economic growth, tight monetary policies and heightened geopolitical tensions. However, some emerging markets are booming with IPO activities, as they benefited from the global demand for rich mineral resources, their vast population, growing unicorns or entrepreneurial SMEs. These and other findings are published in the EY Global IPO Trends Q2 2023.

While the technology sector has continued to be the leading sector in IPO activities to date in 2023, IPO proceeds raised by companies from the energy sector have dwindled on the back of softer global energy prices. As well, cross-border activity has experienced a significant surge in both volume and proceeds, primarily attributed to the growing influx originating from China and entering the US and a steady flow into the Swiss Stock Exchange. 

The SPAC market continued to be challenged with negotiations becoming increasingly complex. There is still an exorbitant number of SPACs yet to announce or complete a de-SPAC facing liquidation by the expiration period in the next six months. It is expected that SPAC IPO activity will return to more sensible and sustainable levels seen pre-2021. 

Download our latest IPO report

The EY Global IPO Trends Q2 2023 report provides deeper analysis and insights.

Explore the data (pdf)
Female kite surfer background

Overall regional IPO performance: Q2 performed better than Q1

How EY can Help

  • IPO readiness assessment

    With decades of experience helping companies go public, our IPO readiness assessment team can help you get ready for the big day — and beyond. Learn how.

    Read more

  • IPO destination services

    Our IPO destination services team can help you choose the best place to list your company — be it your home market, nearby or overseas. Learn more.

    Read more

While the number of IPOs remained flat, the Americas region saw an increase in proceeds of 86%, raising $US9.1b, YOY. This growth was primarily attributed to a single mega spin-off IPO, which happened to be the largest US IPO since November 2021. The US experienced an uptick driven primarily by a few large deals and recent improvements in market sentiment could be a sign for more US IPO activity later in 2023 or 2024. However, despite the positive developments, it may take the overall Americas IPO market longer to recover than many market participants forecasted at the beginning of the year due to the unforeseen banking crisis in 2023. 
 

In the year to date (YTD), the Asia-Pacific IPO market has maintained its position as the global leader in IPO volume and value, with an approximate 60% share. Of the top 10 global IPOs, half were from Mainland China and one was from Japan. The region saw 371 IPOs raising US$39.4b in this period, a YOY decline of 2% and 40% respectively – proceeds were down significantly due to a cooler-than-expected Mainland China IPO market, with many large IPOs waiting on the sidelines. For the first time in over 20 years, Indonesia has surpassed Hong Kong in the global stock exchange rankings by volume. 
 

EMEIA IPO activity has continued to shrink, with 167 listings raising US$12.4b YTD, a 12% and 50% decline respectively YOY. Despite this, the region kept its position as the second largest IPO market with 27% of all IPO deals, and the second biggest IPO at US$2.5b. India exchanges also broke a two-decade streak, jumping to the top spot in deal count. However, inflation levels in most European countries remain challenging, and the lack of liquidity continues to hold back IPO activity. 

Q3 2023 outlook: pipeline still in holding

A resurgence in global IPO activity is anticipated to start late 2023 as economic conditions and market sentiment gradually improve with the tight monetary policy entering its final stage. 

After the one mega spin-off IPO debut in the US that outshone all other traditional IPOs, there are strong indications that this trend will persist. Large corporate spin-offs and carve-out listings will likely surface across major markets, as companies seek to create more shareholder value through divestiture, while investors lean toward mature, profit-making businesses amid a yet-to-revive IPO market. 

Understanding the different requirements of each IPO market that companies plan to enter is essential to meet investor expectations and avoid potential delays due to regulatory issues. Investors will continue to be more selective, orienting toward companies with solid fundamentals and proven track record. All options, from alternative IPO process (direct listing or de-SPAC merger) to other financing methods (private capital, debt or trade sale), should be considered. 

Against the backdrop of a divergent global economy and unpredictable geopolitical landscape, some stock markets are reaching a long-time high and enjoying low volatility. Certain theme-centric sectors such as technology and clean energy are signaling an upswing in IPO activity. Large, well-established companies are demonstrating enduring resilience, while growth narratives with more realistic and acceptable valuation are becoming more receptive by the market. 

In this shifting environment, companies need to prepare now to be ‘IPO-ready’ for any forthcoming windows.

Guide to going public

Our guide to going public covers strategic considerations before, during and post-IPO.

Download (pdf)
ipo globe





To get more insight into the steps companies need to take to maximize their chances of IPO success, download our Guide to going public (pdf).

Previous IPO reports

Summary

The EY Global IPO Trends Q2 2023 shows emerging markets are thriving in the first half of 2023 amid a slow global IPO market. A resurgence in global IPO activity is anticipated to start in late 2023 as economic conditions and market sentiment gradually improve with the tight monetary policy entering its final stage.

About this article

Photographic portrait of Paul Go
Paul Go
Asia-Pacific EY Private Assurance Leader
Leads Chinese and multinational companies in client servicing domain. Heads Hong Kong real estate, hospitality and construction sector audit group.

Contributors

Related topics
IPO
Private business
Technology
Health
Private equity
Life sciences
Entrepreneurship

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.