The amount of money raised through IPOs across Europe slumped by more than 90% in the third quarter of the year, new figure reveal today.
Regulatory changes and political uncertainty in the run up to elections in the UK and France were blamed for the dramatic fall in activity - but the rest of the year is also expected to stay “relatively quiet”.
There was just one significant new listing in London with three others in Europe, according to figures from consultants PwC’s latest IPO Watch EMEA.
however, despite the steep downturn - the first this year - proceeds for the year to date are still up more than 30% on 2023.
Overall, Europe saw 8 IPOs raising just €0.3 billion (£250 million), a fall of €3.3bn compared to the same period last year and a drop of €6.3bn compared to the previous quarter.
Despite the quieter quarter in Europe three significant IPOs launched in September including academic publisher Springer Nature in Frankfurt, frozen bakery giant Europastry on the Madrid Stock Exchange and convenience store chain Zabka in Poland.
In London just £50 million was raised in the third quarter through the IPO of financial services company Rosebank Industries. But PwC said that with shares in Raspberry Pi, which listed in the previous quarter trading up 38% “the sentiment and momentum around the UK market remains positive.”
Kat Kravtsov, Capital Markets Director at PwC UK, said :“After a period of short-term volatility over the summer that saw a number of IPOs postponed, mainly due to the macroeconomic headwinds and multiple elections around the world with the US still to come, capital market conditions have since started to stabilise.
“Whilst the EMEA IPO market has seen a few transactions launching in September, the remainder of 2024 is expected to be relatively quiet with activity expected to pick up in 2025. Notably, early preparation and IPO readiness remains front of mind as there is a significant backlog of private equity exits and corporates that are looking to access the market next year.”
Vhernie Manickavasagar, Capital Markets Partner at PwC UK, added, “Despite a quiet summer, the IPO market is currently being tested by a few large IPOs in Europe, three of which are private equity-backed, demonstrating continued sponsor appetite for IPOs. With a backdrop of stabilising equity capital markets and a significant backlog of maturing PE-backed investments, we expect to see increased IPO and follow-on equity issuance activity from the sponsors in 2025. The focus will be on achievable valuations and post-IPO performance
“The UK capital markets has also witnessed a generational change with new listing rules now in place designed to attract more companies to IPO in London. The impressive aftermarket performance of Raspberry Pi and Rosebank Industries coupled with a few further IPOs, including Applied Nutrition, expected to test the market in 2024 should instil confidence in the growing IPO pipeline targeting 2025.”
By contrast the investment grade corporate bond market in Europe saw an issuance volume of approximately €150 billion in the third quarter.
Sarah Hitchen, Partner and Capital Markets Leader at PwC UK, said: “Greater interest rate stability has seen a return to volumes across the debt markets in the third quarter. However, we have seen the yields on European investment grade bonds rising, which was influenced by persistent inflationary pressures and cautious monetary policies by the ECB.”
