- H1 2022 IPO activity on the UK main market and AIM saw a collective 45% decrease in deal numbers and a 94% drop in proceeds compared to H1 2021
- Global IPO activity followed a similar path and fell in H1 2022, with a 47% decrease in deal numbers and a 59% drop in proceeds compared to H1 2021
- Geopolitical and macroeconomic headwinds are expected to continue through H2 2022
The London Stock Exchange has reported a slow first half to 2022, with 26 issuers raising £595m in the first half of 2022, compared to 47 issuers raising £9.4b in the same period the year before.
In the second quarter of 2022, the main UK market listed six IPOs which raised £192m in total, whilst the Alternative Investment Market (AIM) saw just one admission, raising £6m. The largest main market IPO in the period was Financials Acquisition Corp which raised £150m and the only AIM admission was EnSilica plc, which raised £6m.
UK IPO performance during Q2 2022 starkly contrasts the same period in 2021, when there were 12 IPOs on the main market and 13 on AIM, raising a combined total of £3.8b – a value 19 times higher year-on-year.
Scott McCubbin, EY UKI IPO Leader, comments: “The London IPO market has experienced a very difficult start to 2022. There is a perfect storm of geopolitical pressure creating a challenging macroeconomic landscape, which are compounded by inflationary pressures focused on high energy and commodity prices leading to associated interest rates rises. We expect a weak IPO market for the remainder of 2022 due to these challenging conditions.
“However, the pipeline of IPOs is healthy, with a number of delayed IPOs because of the turbulent market conditions in the first half of the year. This provides a more positive medium to long-term outlook, although the timing of a rebound is hard to predict given the uncertain geopolitical and macroeconomic landscape.”
Global IPO activity declined significantly in H1 2022
The Global IPO markets reported 630 IPOs in H1 2022, raising $95.4b. This represents a 58% valuation drop when compared year-on-year and is 46% lower in terms of the number of IPOs.
Global energy IPOs led the way in terms of proceeds, with $27.9b raised in total – more than any other single sector. Technology and life science IPOs, which had been the key growth area in recent years, saw a marked decline, with a combined 197 IPOs in H1 2022 compared to 504 in the first half of 2021.
China accounts for over half of all global IPO proceeds
Shanghai was the leading global exchange in terms of proceeds in H1 2022, hosting 69 IPOs and raising over $32.6b in the process, representing a 46% increase in proceeds when compared to the same period in 2021. When combined with the Shenzhen and Beijing exchange, China accounted for 28% of global IPOs by number and 51% by proceeds in H2 2022. The NASDAQ, which was most prevalent market in 2021, saw a marked decline, with only 48 IPOs in H1 2022 compared to 162 in the equivalent half in 2021, with a reduction in the number of technology IPOs specifically.
Debbie O’Hanlon, EY UKI Private Leader, concludes: “The global equity markets have experienced a turbulent first half of the year, with a significant decline in activity compared to the record-breaking IPO market in 2021. The previous driving forces of technology and life science stocks have seen reductions in share price, leading to a weakening in investor sentiment. These sectors have been trumped by the energy market as the leading sector for global IPOs. There are however, pockets of optimism globally, notably in the Asia-Pacific region, where positive economic developments and new Government policies in China are expected to drive further activity. However, the overall IPO outlook for H2 2022 remains challenged in the short-term.”