European and US IPO markets show some signs of promise in Q3 2023, further recovery will require macroeconomic stability

• IPO activity showed signs of thawing in the US and Europe, marked by a few successfully completed IPOs.

• The London Stock Exchange remained the leading exchange for follow-on issuance in Europe in Q3 and YTD in terms of the number of transactions and proceeds raised.

• The macroeconomic environment will continue to shape the performance of global equity markets and further stabilisation will support IPO activity through 2024.

European IPO activity has seen an uplift in the third quarter of the year compared to the previous two quarters, but overall the market still remains subdued - according to PwC’s latest IPO Watch. 

Q3 2023 delivered 33 IPOs across Europe raising €4.6bn, up on the last quarter (26 IPOs with a value of  €2.1bn), although this is still down in comparison to the same period last year in value terms (21 IPOs with a value of  €9.6bn). Notable IPOs from the past three months include the €813m IPO of healthcare company Schott Pharma, the €605m IPO of machinery company Thyssenkrupp Nucera, and the €1,884m IPO of utility and energy company Hidroelectrica.

In Q3 and YTD 2023, the London Stock Exchange (LSE) was the most active exchange for follow-on equity issuance in Europe by both number of transactions and proceeds raised. The LSE delivered 94 follow-on equity transactions raising £14.6bn this year.

Global IPO market

Global IPO activity in Q3 2023 totalled US$33.8bn from 284 IPOs - slightly down from the previous quarter that saw $37.5bn raised from 249 IPOs and down compared to the same period last year which saw US$46.6 raised from 291 IPOs. Whilst the macroeconomic environment in Europe continues to be uncertain, the US has shown signs of recovery in Q3, with three large technology companies completing their IPOs in the last quarter.

Chinese Mainland continued to dominate new issuance activity in Q3, accounting for almost 35% of global IPO issuance, raising $11.7bn, followed by the United States ($9.3bn) and India ($2.3bn). The IPO market in the Middle East remained active, supported by the ongoing privatisation drive. The computer and electronics sector drove global IPO proceeds, accounting for 40% of the total raised in the quarter. The United States led the further offers market raising $31.6bn, followed by China ($12.2bn) and India ($5.5bn).

Kat Kravstov, Capital Markets Director at PwC UK, said:

“This quarter felt more positive, with a degree of excitement around IPOs again, particularly in the US, where we have seen three large tech companies going public and a general uptick in IPO filings. In Europe, the number and proceeds raised from IPOs continued to rise over the last three quarters, but overall activity remains subdued. Pricing of recent IPOs points to a narrowing of the valuation expectations gap between investors and issuers, but focus remains on the aftermarket performance.” 

“Looking ahead, investor appetite for IPOs will be heavily dependent on the stability of the global macroeconomic environment and clarity on interest rates, as well as a track record of positive post-IPO performance.”

Richard Spilsbury, Capital Markets partner at PwC UK, added:

“Whilst IPO activity picked up marginally in Q3 compared to Q2, activity remains well below the highs of 2021, despite secondary markets indicating there is ample liquidity ready to be deployed into public markets. Going into the final quarter of 2023, we don’t expect IPO activity to pick up significantly as investors continue to wait for the macroeconomic environment to stabilise. For IPO markets to recover in 2024, further work needs to be done on narrowing the valuation gap between investors and shareholders as we have begun to see in the US with shareholders accepting lower IPO valuations compared with the previous funding round.”

Ends

Notes to editors

Europe IPO Watch

Global IPO Watch

All market data is sourced from Dealogic and has not been independently verified by
PricewaterhouseCoopers LLP.

Industry classification is based on Dealogic General Industry Group (GIG).