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London stock market IPO proceeds fell 40% in 2023

London stock market IPO proceeds fell 40% in 2023

The London stock market saw just 23 issuers listing in 2023, which is a 49% decline on the 45 recorded in 2022, according to research by EY. This represents the quietest year recorded since 2010 when EY first started collating this data. 

The 23 issuers in 2023 raised £953.7m in total, down 40% from the £1.6bn raised in 2022. The largest initial public offering (IPO) in 2023 was CAB Payments, which raised £291.5m in July 2023. In Q4 2023 there were no IPOs on the main market or Alternative Investment Market (AIM) as the London stock market continued to be affected by headwinds including rising inflation, interest rate rises and geopolitical tensions.   

Mixed global picture

Global IPO volumes fell 8% in 2023, with proceeds down by 33% compared with 2022. In total, 1,298 IPOs raised US$123.2bn. Despite the downward trend, several emerging economies, like Indonesia, Malaysia, and Turkey, saw increases in transaction volumes and revenues, according to data from the comparison team at CasinospotFR. There was a rise in the number of IPOs in Thailand, Saudi Arabia, and India. 

In Asia-Pacific, 732 companies raised US$69.4bn, a year-on-year fall of 18% in volume and 44% in value. Revenue from Hong Kong’s IPO market hit a 20-year low, and China’s IPO pace slowed in the second half of 2023. For example, IPO activity on the Hong Kong stock market significantly decreased in 2023. In the first three quarters of the year, 44 IPOs were conducted, raising HK$24.7bn, which is 14% less in terms of the number of deals and 61% less in terms of funds raised compared to the same period in 2022.  

The US IPO market saw some bright spots in 2023, with 42% more IPOs on exchanges that translated to over 160% increase in proceeds compared with 2022. Specifically, seven IPOs garnered over US$500m each last year, compared to just four in 2022. The EMEIA IPO market saw a 7% rise in volume contrasted by a 39% decrease in proceeds, with 413 deals raising US$31.1bn in total.  

Technology IPOs continued to have the highest proceeds, raising US$32.2bn. However, the sector saw declines driven by subdued investor reception to high-profile tech IPOs in the US and generative artificial intelligence (GenAI) startups still in the venture capital stage. The industrials sector had the most deals in 2023 (265), while the consumer sector was the only sector to increase by IPO volume and proceeds year-on-year.

“Whilst market conditions remain challenging, appetite for IPOs is high and smaller deals are emerging with improved after-market performance,” commented Debbie O’Hanlon, EY UKI Private Leader. “With many governments now taking measures to boost IPO activity – particularly in high-growth economies – it’s essential that IPO candidates focus on building fundamentals and managing price expectations to be ‘IPO ready’ when the window does open in 2024.”

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