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Global IPO market enters third year of decline

by Thea Coates Finance Reporter
15th Apr 24 10:39 am

The global IPO market has had a rough few years. After a 70% plunge in 2022, the worst year for IPO deals since 2016, followed by a 30% drop in 2023, the total value of deals continued falling in 2024 despite the growing confidence among both issuers and investors.

According to data presented by Stocklytics.com, global IPO activity dropped by 15% year-over-year, with the total value of deals reaching $25.6 billion last week.

The last few years were quite challenging for companies looking to transition to public ownership.

The turbulent economy made investors more wary of taking risks and less likely to invest, while poor post-IPO share price performance delayed many IPOs throughout 2022.

As a result, the total value of deals plunged by over 70% year-over-year.

However, the dramatic slowdown in global IPO activity continued in 2023, with high inflation, rising interest rates, and the gloomy economic outlook cutting the total value of deals by a further 30% to $120.1 billion.

Although 2024 kicked off on a cautiously optimistic note, driven by triple-digit growth in the US and European markets, the numbers on the global level are not that promising.

According to the Wall Street Journal and Dealogic data, the total value of IPO deals hit $25.6 billion in the second week of April, showing a 15% drop year-over-year. Most of that decline came from the Canadian market and the usually energetic Asia-Pacific region. The total value of deals in the Canadian market slumped by 97% year-over-year, while Japanese and Asian IPO activity dropped by 40% and 61%, respectively.

On the other hand, European and USD markets showed plenty of IPO activity in the four months of the year. US companies raised $7.2 billion through IPOs year-to-date, or 175% more than in the same period a year ago. The European market saw even bigger growth, with the total value of deals surging by 308% year-over-year to $7.4 billion.

Although tech companies led the global IPO activity last year, with $8.47 billion worth of deals, statistics show the largest IPO activity in 2024 comes from the healthcare sector.

So far, healthcare companies have completed $6.49 billion worth of IPO, or five times more than in the same period last year. The tech sector has seen the second-largest IPO activity, with $4.11 billion worth of deals in four months, less than half the value reported in the same period a year ago. Retail, transportation, and consumer products companies follow, with $2 billion, $1.7 billion, and $1.6 billion worth of deals, respectively.

Statistics also show Morgan Stanley is the number one advisor on IPOs this year, with nearly $1.63 billion worth of deals year-to-date. Goldman Sachs and City follow with $ 1.42 billion and $1.4 billion, respectively.

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