“2024 has set the stage for what we anticipate will be a further revival of the IPO market in EMEA and beyond in 2025. Private equity backed IPOs in Europe have seen success in 2024 and an interesting trend has started to emerge whereby the sponsor has retained a stake in the company at the point of IPO - which has reassured other IPO investors - and exited post-IPO at a higher price point. We have also seen the UK’s equity markets begin to return to normality signalled by the return of net inflows into UK equities in November for the first time in 42 months and the announcement of larger listings in London towards the end of the year. Preparations for a number of significant IPOs are already underway, providing momentum for what is hoped to be a big year for the UK markets in 2025.”
Vhernie Manickavasagar
Partner, UK IPO Leader
Positive equity market performance, lower volatility, falling interest rates and inflation returning to central banks’ targets has laid the foundation for a strong IPO environment in 2025.
2024 has been a pivotal year in the fight against inflation, with central banks beginning to ease monetary policy as inflation has dropped across EMEA. The improving macroeconomic environment, along with falling interest rates, has led to a gain of over 7% across the Stoxx 600, the FTSE 100, the JSE and the DAX 30, with only the TASI ending the year in negative territory due to lower oil prices, which drive a significant proportion of the index.
In 2024, EMEA IPO proceeds surpassed those of the previous year, despite a subdued IPO activity period in Q3. The decline in the third quarter was mainly due to multiple elections and regulatory changes over the summer months. However, a resurgence in IPO activity occurred in Q4 as election results settled across Europe and the effects of the US election began to influence the EMEA market. This stabilisation of the macroeconomic, political and regulatory environment has led to a more favourable outlook for IPO volumes in EMEA region heading into 2025.
Africa region recorded two IPOs during the year, collectively raising over $500m (up 60% from 2023). Noteworthy was the listing of a South African convenience store chain, which marked the largest IPO in South Africa since 2017. This IPO has demonstrated strong aftermarket performance, up 24% since IPO, showcasing investor confidence.
The Middle East experienced robust IPO activity with over 75 IPOs generating more than $13bn (down 6% from 2023). The region saw significant momentum in Q4, including the three largest IPOs of the year in the region. A standout IPO in November became the largest global technology IPO of 2024, raising $2bn on the Dubai Financial Market. The first week of December saw another IPO in the Middle East with proceeds of $0.5bn, continuing the momentum.
European IPO proceeds more than doubled in 2024 compared to previous year, driven by the return of significant private equity backed IPOs. The success of the PE-backed IPOs in 2024 is expected to lay the foundation for further PE listing activity in 2025.
European IPO markets began a gradual return to normality in 2024, supported by an improved macroeconomic backdrop, decreasing inflation, and interest rate cuts across Europe. These factors have provided a more stable environment for further IPO activity as we look ahead to 2025. Although overall post-IPO performance in Europe was mixed, some of the largest IPOs of 2024 delivered solid returns.
With global private equity assets under management at a record high of $5tn, indicating a significant backlog of maturing investments, we expect to see a more active IPO market for PE-backed assets as pressure builds to realise value and the IPO market provides a viable monetisation route.
IPO proceeds from the consumer sector represent over half of total European IPO proceeds raised in 2024, with four of the top five European IPOs in this sector.
The London equity market has shown progress in 2024 with a number of AIM to Main move-ups, several IPOs and the recent spin-off of a media company. With elections and listing reforms out of the way, there is a sense of greater stability and investor confidence as demonstrated by the recent reversal of persistent outflows from UK equities and robust secondary markets, demonstrated by large follow-on equity transactions.
Increasingly positive backdrop for equity issuance with IPO volumes continuing to normalise. Increased macroeconomic stability, a continued flow of resilient economic data and base rate cuts in major western economies have resulted in strong performance for equity markets in 2024, particularly in the US. The MSCI World index ended November up 18% year to date.
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Q3 2023 corporate bond market reveals mixed results as uncertainties of the macroeconomic environment impacts investor expectations.
As global IPO markets continue to recover, 2024 is poised to be a pivotal year for the London IPO market. PwC invites you to join us for an insightful panel discussion, "Why Now is the Right Time to Consider a London IPO." In this session, we explore the current market sentiment and outlook for IPOs in London, discuss recent regulatory changes, and highlight the key attributes of a successful IPO. Our distinguished panel of experts from the financial and legal sectors will provide valuable insights into the opportunities and considerations for companies contemplating this significant step.
