5 minute read 16 Jul 2020
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COVID-19 pandemic locks down IPOs but market activity continues



Multidisciplinary professional services organisation

5 minute read 16 Jul 2020

COVID-19 all but suspends London IPO activity but fundraising continues. 

The COVID-19 pandemic caused IPO activity in London to effectively cease in March and this persisted throughout the second quarter of the year. Market activity in the quarter was predominantly focussed on existing issuers leveraging their public listings to raise further capital to shore up finances as the pandemic lockdowns caused economic shutdowns across the globe, in what should have been one of the most active quarters for IPOs in the year. 

The Main Market saw just one IPO take place, Blackfinch Spring VCT plc which raised some £3m, while there was no IPO activity on the Alternative Investment Market (AIM). However, what the market did witness was the second listing under the London Shanghai Stock Connect programme with the Shanghai listed China Pacific Insurance Group, successfully raising £1.4b by listing GDRs in London.

Given the circumstances, activity by existing issuers dominated the market with some £17.2b being raised in a range of placings, rights issues and other transactions. In the period there were 121 transactions with a deal value over £5m, 69 on the Main Market raising £15.2b, and 52 on AIM raising £2.0b. Combined with activity in Q1 total funds raised were in excess of £21b, making this the busiest first half for follow-on fundraising since 2009 and the end of the financial crisis.

In aggregate over 40% of follow-on capital raised in Europe in the quarter was raised in London, once again confirming the market as the pre-eminent fundraising location within Europe. If IPO and follow-on funds are combined London sits in third place globally behind a combined NYSE and NASDAQ in first place and Hong Kong in second.

Something to celebrate in the quarter was also the 25th anniversary of AIM. Whilst it didn’t register any IPO activity in the quarter, during its 25 year lifespan over 3,800 companies have listed raising in aggregate over £45b on IPO.

‘London has again confirmed its status as a pre-eminent equity market globally, leading the way in Europe for the most follow-on capital raised in Q2 2020.  Whilst IPO activity has been almost extinguished by COVID-19, in what is historically the busiest quarter of the year, the markets were focussed on supporting  fundraising by existing issuers to shore-up finances to mitigate the impact of the pandemic.’
Scott McCubbin, EY UKI IPO Leader


In the Q1 IPO Eye we highlighted that the markets had experienced volatility levels not seen since the 2008 crisis and there was a corresponding fall in market indices in the period to March 2020. Since then there has been a gradual reduction in volatility and the London markets have recovered, but they are some way short of their pre COVID-19 highs and around 20% lower than they were at the start of the year.

The best performing sectors this year have, unsurprisingly, been healthcare and personal care, with the worst performing sectors being travel and leisure and automotive.

Global IPO activity

Globally, there were 186 IPOs raising proceeds of US$41b in the second quarter of 2020. Unsurprisingly, this is a 39% decrease in deal numbers and a 32% decrease in proceeds compared to Q2 2019. The COVID-19 outbreak reduced IPO activity particularly in the first two months of the quarter with a 48% decrease by volume (97 deals) and a 67% decrease in proceeds (US$13.2b) compared to April and May 2019.

There was a late flurry of deals in June, bringing total activity to 186 deals raising $41.1b in the quarter making global activity for H1 2020 some 19% behind H1 2019 for deal numbers and a decrease of 8% in proceeds. Despite Global totals showing a decline against 2019, the Asia-Pacific markets actually outperformed H1 2019 as activity rose 2% by deal numbers (270 deals) and 56% by proceeds (US$34.9b) as this region restarted activity. To find out more about the global IPO activity in this quarter visit our Global IPO Trends following the link here.

Looking forward — H2 2020

The markets have faced severe headwinds, but despite this, stock prices and valuations are recovering, reflecting improved investor sentiment and risk appetite. The volatility index (VIX®) has also receded considerably from its high in March, approaching levels more receptive for companies to go public.

Assuming there is no significant ‘second wave’, there is a market window opening in London for the period post summer and we have already seen AIM start its 26th year with a new admission in early Q3. H1 2020 deals that were originally shelved and pushed into 2021 are now being considered for potential H2 2020 listings, albeit it is likely that market activity will be again dominated by fundraising activity from existing issuers.

Any issuers will need to be able to demonstrate resilient performance through the first half of the year and have a business model that can withstand any further COVID-19 driven downturns ahead. We are expecting this to include businesses in the technology or technology-linked sectors that are less impacted by physical restrictions and as we have stated before, investors will be discerning in their choices.


Given the COVID-19 outbreak and its negative impact on global economic activities, in the short to medium term, governments around the world will continue to implement policies and stimulate economies against rising unemployment. At the same time, central banks will inject more liquidity into the financial systems. Both actions bode well for equity markets and IPO activity in H2 2020.

Nations that have come out of lockdown are seeing activity, notably Asia-Pacific markets have had a relatively busy June, and we would expect this to continue into the second half of the year.

However, there is a lot of uncertainty ahead including lingering geopolitical tensions, Brexit negotiations, low oil prices and the US election later in the year. These compounded by a potential ‘second wave’ of COVID-19 could hamper the markets later in the year and reduce the uptick in momentum that we have seen.

‘IPO pipelines continue to grow in major markets. A further rebound of IPO activity is expected in H2 2020, on the back of strong June global IPO performance. However, uncertainties continue to be present. A possible second wave of COVID-19, US-China tension, Brexit negotiations, the US election and low oil prices could derail some of the positive global momentum we began to see in June.’
Scott McCubbin,


The market activity was predominantly focussed on existing issuers raising capital as COVID-19 pandemic caused IPO activity to effectively cease in London in Q2 2020.

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