Record breaking IPO activity in 2021 but outlook less certain
Last year was a bumper year for the UK IPO market but the outlook for 2022 is “much less certain”, according to EY’s latest market tracker.
London witnessed a record number of IPOs in 2021 with 121 IPOs, the highest since 2007, raising total funds of £16.3bn.
EY’s IPO Eye said the main market continued to see a significant flow of IPOs in Q4, with 17 IPOs raising £1.9bn, surpassing the 15 IPOs in Q3, although Q3 proceeds were higher at £2.9bn.
The Alternative Investment Market (AIM) also saw activity with a further 29 IPOs in the final quarter of the year raising £1bn. This brings total funds raised through IPOs in Q4 on both markets to £2.9bn.
The financial services, real estate and software sectors contributed the largest IPOs in the quarter, with Pantheon Infrastructure, Life Science REIT and Softline Holdings all raising £0.3bn to £0.4bn from their respective IPOs.
Follow-on activity reduced slightly in Q4 with existing issuers raising circa £6.5bn, bringing the annual total to over £32.7bn, with the money raised from rights issues declining from the peaks seen in 2020 and early 2021.
Scott McCubbin, EY UKI IPO leader, said: “Last year was an exceptional year for the UK IPO market, with companies taking advantage of the open market to list in record numbers.
“The outlook for 2022 is much less certain, with a number of prevailing headwinds, including inflationary pressures, which are likely to lead to interest rate rises and a move towards bond markets with more attractive yields. Supply chain issues and weaker consumer spending due to energy price rises also threatens market strength and may lead to a weaker equity market later in the year.”
