(BFM Bourse) – Following the trend of 2022, the global IPO market experienced a soft spot in the first quarter of this year. At the end of March, these companies raised 60% less than in the first three months of last year.
Already in decline last year, the IPO market is far from emerging from its torpor at the start of 2023. At the end of March, less than 300 companies – 299 exactly – had listed on the stock market. worldwide compared to 326 last year, a decrease of 8%.
But it is above all the amounts raised that have taken the brunt. All of these new companies raised only $21.5 billion, or 61% less than in the same period of 2022. The market context is still not conducive to a listing renewal. The lack of visibility induced by current market conditions has in fact limited initiatives in this area. “The first quarter was another period of slowdown in a context of rising interest rates, persistent inflation and unexpected turbulence in the global banking sector”, recalls Franck Sebag partner at EY.
A still wait-and-see position
In Asia-Pacific, an area which represented 59% of operations worldwide, the amounts raised fell by 70% in the first quarter of 2023. Here too, operators preferred to adopt a wait-and-see posture before glimpsing a possible thinning to launch their process. “Hong Kong, which is also usually a powerhouse for new listings, has been unusually calm. market”, continues Franck Sebag.
Regarding the EMEIA region (Europe, Middle East, India, Africa), the situation is not much better. The fall continues with amounts raised plunging 36% amid “many companies withdrawing or postponing their IPO applications due to market conditions”.
The poor stock market debut of companies that have recently arrived on the stock exchange also has something to discourage both companies applying and investors from participating in these fundraisers. In France, Lepermislibre and Florentaise, the only two IPOs of 2023, did not convince investors. The e-learning driving specialist has had a bumpy ride, with a stock that had fallen more than 40% in just a month and a half of trading before recently regaining conceded ground. As for the specialist in low-carbon soil, it finalized its operation not without difficulty, to take its first stock market steps this Thursday on Euronext Growth, the compartment dedicated to small and medium-sized enterprises.
The quarterly study by the firm EY also looks back on the collapse of IPOs of SPACs, these so-called “blank check” companies, which solicit the markets with the sole objective of making one or more acquisitions. In vogue during the 2020s and 2021, the number of IPOs of these unique companies has collapsed since 2022. The high level of liquidations and the poor post-listing performance of SPACs have dampened investors’ appetite for these types of files.
“This quarter, SPAC’s IPO activity hit one of its lowest levels in years – it hit a six-year low in terms of volume, with values also falling. at levels not seen since 2016”, analyzes Franck Sebag. “As market conditions remain difficult and many promoters of SPACs listed in early 2021 must complete or unwind their transactions, IPO activity for SPACs should remain subdued in the short term” continues the specialist.
Mega-IPOs despite everything
Two geographical areas manage to extricate themselves from this ambient gloom. In the Americas, EY notes activity “in line with that of the first quarter of 2022”, even if “it remained well below the levels observed during comparable periods of the last decade. At the end of March, 40 transactions were carried out in the zone for a value of 2.6 billion dollars, i.e. an increase of 11% in volume and 9% in value year-on-year. eight exceeded $50 million.In addition, Canada had its largest IPO since May 2022, with a valuation of more than $100 million.
If this amount is already very impressive, it remains modest compared to the mega-IPO recorded this quarter in the Middle East. And it is an Emirati company that holds the record for the largest operation since the beginning of the year. The company ADNOC Gas raised more than 2 billion dollars last month on the Abu Dhabi Stock Exchange, in a favorable context for the gas sector. The offering was oversubscribed 50 times, generating more than $116 billion in demand from investors.
A glimmer of hope
Should we now draw a line under this 2023 vintage? For EY, a glimmer of hope is taking shape on the horizon. And this is announced for the second part of the current financial year, with the plateauing of inflation, the drop in energy prices and the rebound of the economy of mainland China. “Despite the persistent uncertainty linked to the economic and geopolitical environment, the IPO pipeline continues to expand and the hope of a turnaround in the course of the year remains” hopes Franck Sebag.
Among the files present in the tablets, we can cite the social media platform Reddit which is aiming for an IPO probably during the second half of the year. A little closer to home, Renault, for example, announced last November that it wanted to list Ampere, its entity dedicated to the production and marketing of electric vehicles, on Euronext Paris. Renault’s press release thus refers to the second half of 2023 “at the earliest” as the date of the IPO. Thierry Piéton, for his part, even mentioned “the end of the year” 2023, depending on market conditions.
It should also be remembered that Euronext recently unveiled the list of companies benefiting from its dedicated support program with a view to a potential IPO. In France, 39 companies have joined this program. Among them, companies that speak to the general public, including Evaneos, the tailor-made travel specialist who could join Voyageurs du Monde, which is listed on the stock market. We can also mention Withings, the precursor in terms of connected scales and which has extended its range of products to watches which are also connected.
Since the beginning of 2021, this special training camp for young shoots has enabled the emergence on the stock market of several companies, including the green chemistry specialist Afyren or Broadpeak, the video streaming pro.
Sabrina Sadgui – ©2023 BFM Bourse
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