Global IPO Watch H1 2024

“IPO activity on western exchanges picked up in H1 2024 as the macroeconomic backdrop continued to stabilise. Investor sentiment to equities generally, and IPOs specifically, continued to improve with encouraging aftermarket performance of the 2023 and H1 IPO cohorts. Geopolitics and elections aside, there is a good chance for the IPO window to continue to open through 2024 and into 2025.”

_{Stuart Newman, Global IPO Centre Leader, PwC UK}

Highlights:

The S&P 500 tops global markets in H1 2024, with all major indices apart from the Shanghai Stock Exchange, showing growth

Despite global markets contending with geopolitical uncertainty, resilient economic data, a surge in interest in AI and markets pricing in expected rate cuts in 2024 have meant western equity markets have continued to rise after a strong 2023, with the MSCI World Index increasing 11% in H1 2024.
The S&P 500 leads the way as the major beneficiary of the surge in interest in AI-linked companies, up 14%, whilst the Shanghai Stock Exchange Composite lagged western equity markets as it continues to contend with reduced investor sentiment towards the region.

European H1 IPO activity has been the best in the region since 2021, quadrupling year-on-year

Global IPO proceeds in H1 2024 totalled $49bn, down 16% compared to H1 2023 due to a significant slowdown in IPO activity in China and Hong Kong SAR with IPO proceeds of just $5.7bn compared to $31.6bn, down 82%.
Activity in Americas and Europe provided comparatively strong performance to partially offset this decline, up $7.7bn (78%) and $9.7bn (359%) respectively.
Despite IPO proceeds in Asia Pacific falling 66% compared to H1 2023, due to the slowdown in China and Hong Kong SAR, Indian IPO proceeds doubled to $4.1bn in H1 2024, continuing the impressive trend in IPO activity.

The technology sector fell from the no.1 sector spot for the first time since 2021

Industrials takes the top spot for IPO proceeds by sector in H1 2024, delivering $8.3bn (17%) of global proceeds and three of the top ten IPOs by proceeds in the period.
Consumer Staples and Consumer Discretionary IPOs, together comprised $14.8bn of global proceeds and dominated the European IPO market. This signals an increase in consumer confidence as inflation stabilises, providing an improved market backdrop for companies in these sectors to IPO.
The technology sector dropped from no.1 to no.6, reflecting IPOs of more mature businesses in H1 as investors look for profits and cashflows in addition to – and not exclusively – growth.

Encouraging signs for IPO markets as the pipeline of IPO candidates builds

There is a solid pipeline of companies waiting to go public. Continued positive performance of some of the notable IPOs will be one key to driving market momentum.
Whilst there will likely be bouts of volatility, given the geopolitical backdrop and the upcoming US election, we expect the IPO markets to remain robust as the economic outlook turns more favourable.
Companies will need to be ready for when IPO windows open. These are likely to be tight in H2 2024 due to the US election and those with an eye on 2025 would be wise to start preparing now.

H1 2024 in review: recovery in western equity markets

Equity markets update

Equity markets picked up where they left off in 2023 with an upwards trend in H1 2024. The MSCI World Index increased by 11% in H1 2024.
In April, growing market concerns around the rate of interest cuts by central banks led to a period of price declines as investor adjusted expectations, however markets recovered in the last two months of H1.
The S&P 500, the FTSE 100 and the Stoxx 600 all achieved record highs in H1 2024. The tech-heavy S&P 500 unsurprisingly was the standout performer, up 14%, reflecting continued investor interest in a subset of tech stocks considered to have the best exposure to artificial intelligence (AI).
The FTSE 100 and the Stoxx 600 finished in positive territory, up 6% and 7% as investor sentiment towards European stocks improved supported by stronger economic data.
The Shanghai Stock Exchange Composite was flat lagging behind western markets as headwinds impacting the Chinese economy continued, impacting investor sentiment.

Macroeconomic overview

Despite the geopolitical and monetary policy uncertainty, the outlook continues to brighten as bank lending and industrial activity continues to pick up in developed economies. The global economy has continued to grow at a modest pace and is expected to do so in 2024 and 2025, growing 5.4% and 4.8% respectively. Of all G20 countries, India is forecasting the highest level of annual GDP growth in 2024 of 6.8%.
Whilst interest rates are expected to be kept higher for longer (with the ECB the only key central bank to cut rates to date in 2024), markets are anticipating that policymakers will commit to cutting interest rates in a bid to support economies and spur growth.
Market movements over the next six months will be particularly interesting as they adjust to the various past and upcoming political elections in key countries across the world.
Investors’ worries about macroeconomic volatility and inflation appear to be declining, with the VIX index falling to a low towards the end of June, thus providing a supportive environment for IPO markets into H2 2024 and beyond.

Index performance in H1 2024

H1 2024 in review: Region and Country IPO Performance

IPO performance by Region

Global IPO activity has fallen by 18% in H1 2024 as compared to H1 2023, with proceeds dropping from $58.8bn in H1 2023 to $49.3bn in H1 2024. The number of IPOs fell from 481 to 432.
However, the declines in volume and value hide significant regional differences:
- Americas IPO proceeds up 78%, driven entirely by a rebound in US activity.
- EMEA IPO proceeds up 78%, reflecting a strong performance in Europe, partially offset by declines in the Middle East.
- Asia Pac IPO proceeds down 63%, reflecting a marked downturn in activity in China/Hong Kong SAR, partially offset by a robust IPO market in India.

The Americas

The Americas showed signs of a recovery with the highest proceeds in H1 2024, increasing by $7.7bn (78%) to $17.6bn compared to H1 2023 $9.9bn, despite there being no activity outside of the United States above the $5m (min. value to be included in the data). The region also outperformed H1 2022 ($15.6bn), the only region to do so when compared with EMEA and Asia Pac.
The IPO market in the US continued its momentum from the first quarter, with IPO proceeds raised during the first half of the year nearly double those of the same period last year.
The US market produced three of the top 10 largest IPOs in H1.
The longer-term outlook for IPOs in the US is also promising as a strong and diverse pipeline of companies look to go public, supported by favourable market environment, continued economic growth, inflation nearing the 2% target, potential Fed rate cuts and record dry powder waiting on the sidelines.

EMEA

EMEA IPO proceeds made up 35% of global proceeds in H1 2024, more than double compared to H1 2023 (17% share). Proceeds increased by $7.7bn (78%) to $17.3bn in H1 2024.
Europe contributed over 70% of the region’s proceeds at $12.4bn, an increase of $9.7bn in comparison to H1 2023, and accounted for over 25% of the total proceeds raised globally.
Five of the top 10 largest IPOs globally in H1 were in Europe, including the three largest IPOs globally each raising over $2bn.
Mostly positive aftermarket performance of recent European IPOs, underpinned by conservative pricing strategies and deeper IPO discounts, provides further momentum for the deal flow in the second half of the year and beyond.
Private equity sponsors have played a prominent role in the recovery of the European market in the first half of 2024, with over half of the top 10 IPOs being PE backed.

Asia Pac

Proceeds in Asia-Pacific declined significantly, down $24.7bn (63%) in H1 2024 with IPO activity faltering in China/Hong Kong SAR.
Proceeds in China/Hong Kong SAR fell $25.9bn (82%), with volumes declining by 108 (63%) in H1 2024 as compared to H1 2023. Hong Kong SAR’s IPO market is aiming to rebound in H2 2024 following the Government’s recent initiatives to support Hong Kong SAR capital markets through the launch of the18C Specialist Technology regime.
In contrast, IPO activity in India continued to grow with proceeds rising to $4.1bn in H1 2024, increasing by $2.7bn compared to H1 2023. IPO volumes more than doubled from 30 to 64, see overleaf for additional information.