The value of initial public offerings in the United States and Europe have fallen 90% this year, as war in Ukraine and rising inflation and interest rates forced companies to put IPO plans on hold in stock Exchange.
According to data from Dealogic, only 157 companies raised a total of $17.9 billion in the first five months of 2022, compared to 628 that raised $192 billion in the same period last year.
Globally, the value of IPOs fell 71% – from $283 billion to $81 billion – during the period and the number of listings fell from 1,237 to 596.
The figures suggest that the drop in emissions in the first quarter of 2022 that was triggered by Russia’s initial invasion of Ukraine has not abated, with volumes also expected to fall sharply year-on-year to the end of the second quarter, later this month. .
The first three quarters of 2021 were the busiest time ever for listings as companies rushed to go public after suspending plans during the coronavirus pandemic. But market volatility, the war in Ukraine and the threat of a global recession have made companies much less willing to do so this year.
“A lot of people were itching to leave, and then a confluence of factors hit them all at once,” said Martin Glass, a partner at law firm Jenner & Block, which advises companies on IPOs.
“Once things stabilize, we will see a return to activity, even if it does not reach last year’s levels. People aren’t abandoning ship, they’re taking a break.
He added that the U.S. market had been hit particularly hard by a near-collapse of special purpose acquisition company listings, shell companies that sign up to raise money and then find an acquisition target.
Over the past two years, Spac transactions have reached record highs, but this has slowed over the past six months, following disappointing performance, increased scrutiny from regulators and a decreasing appetite of the banks to guarantee them.
Traders said that despite deteriorating general conditions for IPOs, rising energy prices following the war in Ukraine made listings a more attractive option for oil and gas companies.
Several major IPOs are also in the works and could be finalized by the end of the year.
British pharmaceuticals group GlaxoSmithKline has sought regulatory approval to list its consumer healthcare joint venture Haleon this year in what is expected to be the biggest London listing for a decade.
In March, US insurer AIG filed for a long-awaited IPO of its asset management and life insurance businesses, which could value the unit at more than $20 billion. Volkswagen is planning a €20 billion partial float of Porsche later this year.
But lawyers predict that many planned IPOs will be pushed back to 2023 as conditions take time to improve.
“Maybe if we come back from summer vacation in September and for some weird reason things have suddenly improved, maybe there will be more activity,” White’s partner Inigo Esteve said. & Case, which advises companies on IPOs.
“But I’m not sure many people are holding their breath for such a change in the underlying conditions by then.”
He added that he expected many to postpone until next year at the earliest. “Why would you go now when you could wait for better conditions? »
Among the 10 most valuable IPOs this year, only two are listed on US or European stock exchanges. Private equity group TPG raised $1 billion on the Nasdaq in January, while Norwegian oil and gas producer Vår Energi raised $880 million in Oslo.