(BFM Bourse) – After an already difficult year in 2022, the global IPO market has not recovered in 2023. The amounts raised on the Paris Stock Exchange have not exceeded 300 million euros since the start of the year.
The year 2022 was a year to forget on the IPO front. Hopes were high for a resumption of operations in 2023. Unfortunately, this scenario did not materialize, according to the latest data from the EY firm which speaks of “a contrasting year”.
In 2023, the number of IPOs worldwide fell below 1,300 operations, to 1,298, for a total amount raised of $123.2 billion. This activity is down 8% in volume and 33% in value compared to the $179.5 billion raised in 2022.
Remember that last year, the number of operations collapsed by 45% to 1,333 due to a macroeconomic and geopolitical context that did not encourage companies to take the plunge into the stock market.
Best in Asia-Pacific
Coming back to 2023, the Asia-Pacific region recorded 732 IPOs for a total amount of $69.4 billion, and thus recorded declines of 18% in volume and 44% in value.
On the other hand, the American market is showing better resistance, notes EY with 153 transactions for $22.7 billion, an increase of 15% in volume and 155% in value. It must be said that Wall Street was animated by large-scale operations, notably in September and October with Arm, the British microprocessor designer whose IPO was more than noticed. The entry of the British flagship then constituted the largest IPO in the world since November 2021 and the arrival on Wall Street of the electric vehicle manufacturer Rivian, valued at $77 billion, at the time.
Above all, Arm preferred to launch in the United States rather than in its original location, London. It is also the choice that was favored by Birkenstock, the German sandal specialist founded in 1774, which raised around $1.5 billion on Wall Street.
A bad vintage in Paris
And how is the market performing in Paris? Once again, the year will be one to forget since only 6 companies tried their luck this year for a total amount of $291.3 million, explains EY. Which represents half as many transactions as in 2022, which was already not a good vintage in terms of IPOs on the Paris market.
The specialist in protection against explosion risks Stif, whose offer result will be known on Friday morning, will very likely close the year’s stock market IPOs.
Before Stif, the last operation dates back to July with the arrival of the natural ingredients specialist Vinpai on Euronext Growth. This flagship compartment for small and medium-sized businesses hosted all of the introductions for the year 2023, i.e. 5.
On the other hand, on the regulated compartment of Euronext Paris, it is quite simply a blank year. No operation with a public offering has been recorded since Lhyfe’s IPO in May 2022. In October, Planisware was on track to unblock this counter and integrate compartment A of Euronext Paris – reserved for capitalizations of more than 1 billion euros – which had not seen new entrants since OVHcloud, the European leader in cloud computing services, in October 2021.
But suddenly, the software publisher changed its mind the day before its IPO, citing adverse market conditions.
The American cosmetics specialist Coty, for its part, favored the professional compartment of Euronext, to offer itself a double listing in Paris (in addition to that in New York). This specific compartment offers flexibility to foreign companies wishing to acclimatize to the Parisian market, by allowing issuers since 2017 the admission of their securities to a regulated market without issue or sale to the public.
A resumption of IPOs in 2024?
What will be the trend for 2024? The EY firm is optimistic and believes that the appetite for IPOs remains high, “driven in particular by the dynamism of smaller transactions”.
“While many governments are taking steps to boost financial markets, activity is particularly strong in Japan, India and the U.S. market. Faced with a stabilizing monetary policy, stock market hopefuls could prepare to more favorable windows for the year 2024”, explains Franck Sebag, partner at EY.
Some companies have expressed directly or through the press their intention to go public next year. The ultra-fast-fashion juggernaut Shein is considering listing on the New York stock exchange, the American press reported at the end of November. The operation considered “the most important in years” is expected for 2024.
In a completely different area, the social network Reddit is also considering launching into the markets and would be at the head of a cohort of candidates “testing the waters”, reported Bloomberg. Skims, Kim Kardashian’s clothing company, is also exploring possible options, including an IPO, Bloomberg also added.
In France, groups could also take their first steps on the stock market in 2024 through a split. Renault still intends to list Ampere, its subsidiary dedicated to electricity, on the stock market in the first half of 2024. But the operation will not be carried out under any conditions, recalled the diamond brand in mid-November, citing the valuation that could be assigned in Ampere. Its general director, Luca de Meo, indicated that the group was targeting a valuation of 8 billion to 10 billion euros.
Sanofi, another CAC 40 company, announced at the end of October its decision to separate from its Consumer Health business, which includes products for allergies, colds, coughs, diarrhea, constipation, etc. This will involve the IPO of this entity, an operation which will take place no later than the fourth quarter of 2024.
On the SBF 120 side, Sodexo will also carry out a division of an activity via an IPO. The collective catering specialist plans to list its restaurant voucher and gift voucher business on the stock market next year. And he renamed it “Pluxee” in preparation for this future split.
Pathé, for its part, aims to join the Paris Stock Exchange by 2024, Jérôme Seydoux indicated to Les Echos in September 2022. The dean of French cinemas founded by the Pathé brothers in 1896 thus wishes to attract new shareholders with a view to financing significant investments in both rooms and content.
Sabrina Sadgui – ©2023 BFM Bourse