Global IPOs remain resilient amid elevated uncertainty and market volatility

• Year-over-year (YOY), the Americas and EMEIA regions recorded double-digit growth by both number and proceeds in the first three quarters
• Asia-Pacific's Q3 rebound contributed to an 11% quarter-over-quarter (QOQ) increase in global IPO numbers, despite a 12% drop in proceeds; Asean saw 28 IPOs with proceeds totaling US$1.1b in Q3
• IPO pipelines highlight EMEIA's sector diversity and ongoing global interest in AI

Amid a global economic slowdown, market volatility, geopolitical shifts and monetary easing, the global IPO market in Q3 2024 has shown signs of cautious optimism. Despite a dip in year-over-year (YOY) volumes by 14% to 310 IPOs and proceeds by 35% to US$24.9b, Q3 did modestly outpace the first two quarters of 2024 in IPO launches.

Navigating through a complex economic and geopolitical landscape, marked by the start of a global interest rate easing cycle, Q3's IPO activity has contended with heightened market volatility. Despite these challenges, the Americas and EMEIA demonstrated resilience in the first three quarters of 2024, with EMEIA's IPO proceeds up by 45% compared to the same period last year, helping to mitigate the global market's overall downturn. These findings are detailed in the EY Global IPO Trends Q3 2024 report.

The persistently lower private equity and venture capital (PE and VC) exit activity over recent years has created a growing backlog of portfolio companies poised for monetization. A resurgence in PE-backed mega IPOs and VC-backed unicorns is taking shape, as current valuation levels become more favorable for launching mature, high-value portfolio companies into the public market. In the first nine months of 2024, PE and VC-backed IPOs made up six of the top 10 global IPOs, accounting for over one-third of the total global IPO proceeds. In the Americas, these IPOs accounted for 52% of the total proceeds, underscoring a greater willingness among PE and VC firms to exit in the current IPO landscape.

Cross-border listings have also seen a significant uptick. In the first three quarters of this year, 77 companies chose to list abroad, up from 64 in the same period last year, a 20% YOY increase. Since 2023, foreign-domiciled issuers have represented approximately 52% of IPOs on US exchanges, reaching a 20-year high. Concurrently, with a contrasting stock market performance between the US and China this year, the market value gap between the two countries has reached a record high in Q3.

Americas and EMEIA rally as Asia-Pacific stabilizes

Year-to-date (YTD), the Americas and EMEIA have shown double-digit growth by both deal number and proceeds compared to the same period last year, despite a global reduction in public offerings owing to the Asia-Pacific’s IPO pause in the first half of the year. The US and India have notably maintained high levels of IPO activity, even during a typically quieter quarter. India launched more than 100 IPOs in Q3, marking its highest level of public offerings in a single quarter over two decades.

Asia-Pacific has made a notable turnaround in the third quarter. By overcoming earlier declines, the region has contributed to an 11% QOQ increase in global IPO numbers. This rebound, marked by increased activity in mainland China, Indonesia, Malaysia and South Korea, has injected confidence into the global market during a period of heightened uncertainty.

YTD 2024, Asean saw a total of 94 IPOs raising US$2.5b, down from 127 IPOs raising US$4.9b. In Q3 2024 alone, there were 28 IPOs with proceeds totaling US$1.1b, representing a surge in proceeds of 100% from the previous quarter that saw 29 deals totaling US$0.6b. This was primarily driven by the prominent listing of 99 Speed Mart Retail Holdings Bhd. from Malaysia, which stood as the second-largest IPO in the region in YTD 2024. Across Asean, other active exchanges in YTD 2024 include Indonesia (34 IPOs raising US$0.3b), Thailand (22 IPOs raising US$0.6b), Philippines (3 IPOs raising US$0.2b). Singapore and Sri Lanka each had one IPO that raised US$19.5m and US$1.5m respectively.

Kevin Chew, Senior Executive Director with the Strategy and Transactions team at EY in Malaysia says:

“The economic climate in Malaysia is showing signs of robust positivity, reflected in the invigorated pace of the Malaysian IPOs. In the first nine months of 2024 alone, the market has witnessed a tally of 36 IPOs. Notably, the third quarter contributed significantly to this count with 14 IPOs. This surge in activity marks a resurgence for Malaysia, boasting the highest number of IPOs since 2006, and signals a strong investor confidence.”

AI companies attract investor interest

Over the past two years, more than 60 artificial intelligence (AI) companies have gone public annually, with about half turning a profit. Approximately 50 AI companies are currently in IPO registration, demonstrating sustained investor interest in AI-driven innovations.

Q4 2024 IPO market outlook

The remainder of 2024 is expected to see the IPO market influenced by central bank policies, geopolitical developments and key election outcomes. Optimism is fueled by lower interest rates and easing inflation, which are likely to encourage new listings and a resurgence in sectors sensitive to borrowing costs. Strong performance in key markets such as the US, Europe and India is expected to support IPO activity. Cross-border listings should continue to thrive, and significant public debuts, especially those backed by PE firms and from spin-offs and carve-outs, are anticipated as they seek favorable public entry points.

Chan Yew Kiang, EY Asean IPO Leader, says:

“With interest rates easing and companies gearing up for growth in the region, IPO activities are expected to pick up in the next quarter and year ahead. Strong fundamentals and demands, together with regulators increasingly exploring policies to support growth companies to tap the capital markets for growth, also bodes well for the markets. We should also expect growing interest in cross-border listings as companies seek to achieve brand equity in other markets that they are venturing into.” 

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