UK initial public offering proceeds were 80% lower in the first quarter than the equivalent period in 2022, and around 99% lower than the record levels experienced in Q1 2021, according to EY’s IPO latest report card.
It said that there were only five IPOs in the first three months, raising just £81m with the largest listing being the £60mln Dar Global on the London Stock Exchange.
The Alternative Investment Market (AIM) saw three IPOs, raising a combined £18m of which £13m came from investment fund Onward Opportunities.
By contrast, during the same period last year, there were 12 IPOs on the London Stock Exchange and seven on AIM, raising a combined total of £400mln, still only a fraction of the £5.7bn raised in the first quarter of 2021.
“The London IPO market continues to experience the extremely challenging conditions witnessed in 2022. There remain strong headwinds including the war in Ukraine, high energy and commodity prices, and wider inflationary pressures,” said Scott McCubbin, EY’s IPO head for the UK and Ireland.
McCubbin pointed to a series of macroeconomic challenges, such as the war in Ukraine, high commodity prices, and wider inflationary pressures for the poor performance.
“We expect the market to remain challenging for the next few months, albeit with some green shoots in the form of an expected reduction in inflation by the year-end. This should help see a return to a stronger equity market later in the year. However, this remains at risk given the continued uncertain geopolitical landscape,” he added.
Global IPO activity was also down by 8% to 299 IPOs in Q1 2023 and 61% lower in terms of proceeds when compared to Q1 2022.
As with the UK market, geopolitical tension, commodity and energy price rises and the impact of the turbulence in the global banking markets has led to a reduction in the number of IPOs.
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