Q3 2022 was largely defined by increasingly hawkish global central banks’ policies, rising interest rates, recession fears and a worsening energy crisis in Europe. With that backdrop, the IPO market in Europe and the UK remained largely closed with the exception of the landmark Porsche IPO in Germany. Overall, European IPO activity for 9M 2022 saw 69 IPOs raising €14.3bn compared to 297 IPOs in 9M 2021 raising €57.7bn.
Equity market performance and volatility
Major European equity indices saw a third straight quarterly decline over the third quarter with the benchmark Stoxx 600 index down 5% in Q3 and down 21% for the year. The picture is similar across various European sector indices with only the Energy index delivering positive YTD performance being up 10%. With global macro uncertainty and deteriorating investor sentiment, volatility also continued to dominate markets with VSTOXX spiking above 30 in late September well outside levels that would support a healthy IPO market (i.e. below 20).
European and UK IPO trends
Q3 2022 IPO issuance in Europe totalled €9.5bn from 12 IPOs compared to €11.5bn from 66 IPOs in Q3 2021. Q3 IPO volume was entirely driven by the Porsche IPO that priced at the top of the IPO price range, reaching €75.2bn market cap at IPO. This was the largest IPO in Germany in over 25 years and the largest IPO in Europe in over 10 years. The London IPO market saw another quiet quarter with only 1 AIM IPO raising £8m for Aurrigo International. The US$300m IPO of Welkin China Private Equity that launched in early September has announced an extension of the IPO closing date to 31 October to accommodate investor demand out of Asia.
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