With only one quarter into 2023, it was more of the same for the stuttering global IPO market. With a total of 299 IPOs raising US$21.5b, an 8% and 61% decrease year-over-year (YOY), respectively, Q1 was another down period amid interest rate rises, a lukewarm stock market, entrenched inflation, and unexpected global banking industry turbulence. Despite this ongoing uncertainty around the economic and geopolitical environment, the IPO pipeline continues to build up and hope remains for a turnaround later this year. These and other findings were published in the EY Global IPO Trends Q1 2023.
Technology companies, which have been a mainstay of IPO activity in recent years, experienced some sharp declines in valuations, and the turmoil in the crypto markets and global banking industry has not helped. While technology continued to lead in IPO volume, four of the top 10 listings in Q1 2023 were in the energy sector.
High liquidation and poor post-listing performance of de-SPACs dampened investors’ appetite for new IPOs. This quarter, SPAC IPO activity was at one of its lowest levels in recent years – it hit a six-year low in terms of volume, with proceeds also down to levels not seen since 2016. As market conditions remain challenging and many promoters of SPACs listed in early 2021 need to complete or unwind their transactions, SPAC IPO activity is likely to be muted in the near term.
The EY Global IPO Trends Q1 2023 report provides deeper analysis and insights.
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