IPOs

IPO markets remain resilient in H1 2021 thanks to hungry investors

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Global IPO momentum continued its record-breaking pace through H1 2021 when a total of 1,070 IPOs raised US$222.0b in proceeds, increasing 150% and 215%, respectively, year-on-year, EY data revealed.

IPO activities in the Americas continued at a fast pace through H1 2021, with 276 IPOs raising US$93.9bn  by proceeds – a 229% increase by volume and 282% rise by proceeds year-on-year.  Health care topped the sectors in terms of volume representing 36% of deals, followed by technology with 31%. By proceeds, those sectors flipped, with technology raising nearly half (49%) of all proceeds while health care accounted for 23%.

In the Asia-Pacific (APAC)  region, IPO activity remained steady with 471 IPOs raising US$74.3bn by proceeds-a 76% and 108% respective increase year-on-year, the highest proceeds for the first half of the year in more than 20 years. Technology led the sectors by both volume (99 IPOs) and proceeds (US$25.1b).

On the heels of a strong bull run in EMEIA equities markets, IPO activity in the region through 1H 2021 surged, resulting in 323 IPOs raising US$53.8b, a 325% and 430% respective year-on-year increase. EMEIA recorded the highest growth rates year-on-year among the three regions.

According to the World Federation of Exchanges First-Half 2021 Market Highlights, the most notable IPOs were the following:

IPOs Capital raised By Region
(Source: World Federation of Exchanges)

AMERICAS

In January Nasdaq-US hosted Affirm Holdings Inc, a financial technology company offering consumer microloans, which raised 1.21 USD billion; Playtika Holding Corp, a mobile gaming company (1.88 USD billion); Shoals Technologies Group, a provider of components for solar energy projects (1.93 USD billion); Qualtrics International Inc, a customer-survey software business (1.56 USD billion); and Ortho Clinical Diagnostics Holdings Plc, an in vitro test maker (1.29 USD billion). In February the same exchange welcomed the region’s largest IPO this year, Bumble Inc, a dating app maker that raised 2.15 USD billion; and in April Applovin Corp, a mobile gaming and mobile marketing company (2 USD billion); and TuSimple Holdings Inc, a company that builds autonomous trucks and driverless vehicles (1.35 USD billion). In May, Oatley Group, a vegan food and drink maker from Sweden, chose the same venue to go public (1.43 USD billion), followed in June by Marqeta Inc, a card-issuing technology company (1.23 USD billion).

APAC

In H1 2021, the APAC region retained its status as the host of the most valuable IPO in the world, with the February listing of Kuaishou Technology, the operator of China’s most popular short-video service after ByteDance Ltd’s Douyin, on Hong Kong Exchanges and Clearing, which raised 6.21 USD billion. The same exchange opened its doors in March by Baidu Inc, a Chinese search engine giant (3.08 USD billion), Bilibili Inc, which provides online entertainment services for the young generations in China (2.99 USD billion); in April by Linklogis Inc, a Chinese fintech firm which specialises in supply chain finance (1.18 USD billion); and Trip.com Group Ltd, a global travel group, increasing its capital by 1.26 USD billion; and, in May, by JD Logistics Inc (the delivery arm of Chinese e-commerce giant JD.com Inc), which went public raising 3.64 USD billion.

The Stock Exchange of Thailand was selected by PTT Oil and Retail Business Public Company Ltd (the retail unit of Thailand’s iggest energy company), which raised 1.33 USD billion in March.

In the same month Korea Exchange introduced SK Bioscience Co Ltd, an AstraZeneca vaccine manufacturer, for 1.26 USD billion, and in May SK IE Technology Co Ltd, a battery material maker, for 2.01 USD billion.

Everdisplay Optronics (Shanghai) Co Ltd, a manufacturer of AMOLED semiconductor display panels, picked Shanghai Stock Exchange in May to list its shares, raising 1.28 USD billion. China Three Gorges Renewables Group, a unit of state-owned clean energy group China Three Gorges, followed suit in June (3.52 USD billion).

EMEA

Deutsche Börse hosted the most valuable IPO in the region, Vantage Towers AG, a telecommunication services company, for 2.53 USD billion in March. In February the same exchange opened its doors to AUTO1 Group SE, Europe’s leading digital automotive platform, for 1.76 USD billion, followed by Suse SA, a German software company, raising 2.05 USD billion in May.

LSE Group London Stock Exchange listed its largest IPO in 2021, in April, Deliveroo Holdings, a food-delivery startup (2.07 USD billion). The same exchange welcomed Dr. Martens Plc, a British bootmaker, in February for 1.81 USD billion, while in May it listed Alphawave IP Group, a Canadian-British company which designs technology used in semiconductor chips, that raised 1.18 USD billion.

Moscow Exchange was preferred by Fix Price, a Russian discount retailer, which raised 1.77 USD billion in March, while BME Spanish Exchanges, welcomed in April Linea Directa Aseguradora, a Spanish insurance company, raising 1.78 USD billion.

HI 2021 IPOs capital raised
(Source: World Federation of Exchanges)

H2 2021 outlook: full speed ahead

In the second half of this year, the IPO market continues its forward momentum as more companies look to go public, taking advantage of favorable conditions. A steady pipeline of US$1b+ IPOs is expected through the year including tech unicorns, SPACs and companies in sectors that have already proved resilient like technology and health care despite the COVID-19, EY says.

On the flip side, H2 2021 may prove challenging as the lingering impacts of the coronavirus crisis continues to affect companies in sectors most impacted by national lockdowns – such as traditional retail, travel, tourism and hospitality. If these sectors fail to recover, global markets will continue to fall short of a full global economic recovery.

Regardless of sectors, those companies looking to go public in H2 2021 should be well-prepared with a realistic vision of valuations while making certain to have an environmental, social and governance (ESG) strategy in place that is already part of their purpose, strategy and culture, EY concluded.

So far, so good. Stimulus packages approved by governments, the savings accumulated during the pandemic, and an increased confidence in the economic recovery boosted the markets. But what really the future holds is unknown and even the best forecasters sometimes miss the mark.