AIM IPOs offer glimpse of recovery for junior stock exchange
An uptick in listings on London’s junior stock exchange has left the City hopeful that AIM might be on the road to recovery after years of IPOs failing to appear.
Two AIM IPOs were announced today – authentication tech firm Quantum Base and accountancy firm MHA – causing hope among investors that further floats might be in the pipeline.
MHA, the UK arm of Baker Tilly, is aiming to raise up to £125m from the float in the coming weeks, while Quantum Base is looking to raise £3m to £5m.
Other companies that have flocked to AIM this year to float include defence firm RC Fornax, and healthcare firms Wellnex Life and One Health Group.
While only five businesses listed on the junior market so far in 2025, this is still a step up from the 11 which pursued an IPO throughout the entirety of last year.
The number of companies either delisting, moving to the main London Stock Exchange, or being taken over has continually surpassed new floats on AIM.
This has caused the total number of companies on AIM at the end of 2024 hit the lowest level in 23 years, with only 688 firms listed on the stock exchange compared to a peak of nearly 1,700 in 2007.
Is AIM back?
The constant bad news for the junior market seems to have finally taken a break, however, as listings seem to be beginning to tick up.
Tom Bacon, a corporate partner at BCLP, told Morning Wire that the firm had engaged with a number of companies looking to join London’s public markets over the last few months.
“Despite a cyclical retreat from IPOs over the last few years, we are now seeing the return of some of that latent demand for going public as the market begins to open,” he said.
“It is great to see some potential IPOs intending to float on AIM,” added Amisha Chohan, head of small cap strategy at Quilter Cheviot.
“Sentiment may have soured, but we have more certainty about the various tax incentives for people investing in AIM, and we hope the government will find a way to kickstart the UK’s capital markets.”
She added that the listings showed there was still an investment appetite for IPOs, and if the government was successful with its reforms, there could be a number of other companies following suit.
Bacon agreed, stating that the government was also making “all the right noises” about trying to encourage more investment in UK equity through pension and ISA reform, “which could be the fuel needed to propel the market forward”.
However, Oliver Pilkington partner in the corporate team at Shoosmiths, argued hat it was still too early to say whether the news heralded the start of a wider recovery of London’s IPO market.
“The Raspberry Pi float in June 2024 and the Canal+ IPO in December both raised hopes, but with hindsight these seem to have been premature,” he said.
The float of Canal+ saw the Paddington producer’s stock price crash more than 23 per cent on IPO day. It is still down more than 12 per cent since it listed in December.
Globacap CEO Myles Milston went even further, stating that AIM was ultimately in a “downward trajectory,” and the introduction of initiatives like PISCES were an acknowledgement “inevitable demise of AIM”.
“The growing popularity and convenience of private funding and the implementation of the PISCES framework will be the final nail in the coffin for AIM,” he added.
Nevertheless, the uptick in listings so far this year seems to have signalled that things might have finally reached rock bottom for the stock exchange.
“While two companies intending to list can’t be described as a turnaround, it could just be the first shoots of recovery coming through,” concluded Chohan.