UK still waiting on IPO revival as 2025 cohort offers glum returns
The London stock market is still waiting for its IPO revival after debuts disappointed in 2025 despite major market pushes from the government and regulators.
In the last year, the average return for new entrants to the London stock market was -3.3 per cent when comparing firm’s debut prices with year-end market closes.
This marked a staggering drop from the 35.7 per cent average return in 2024, though it occurred as the number of companies launching an initial public offering ticked up to 20 from 14.
Dan Coatsworth, head of markets at AJ Bell, said it was a “patchy year” for the UK IPO market with new firms’ performance “going against the grain for what was a superb year for UK stocks more generally”.
The consortium of new firms drastically underperformed the City’s blue-chip index, with the FTSE 100 offering a 22 per cent return in 2025.
Aiming high and falling short
Accountancy firm MHA notched the biggest gain after kicking off its £271m IPO in April – nearly two weeks after President Donald Trump’s ‘Liberation Day’ sent shockwaves through capital markets.
The UK arm of Baker Tilly International entered the AIM index and raised £98m through institutional and retail investors.
Despite a muted appetite at the time of listing as investors scurried away from risk amid trade tensions, MHA managed to net a 54 per cent gain by the end of the year following two upbeat trading updates.
But it wasn’t all positive on London’s junior stock market, with March float Wellnex Life taking an 81 per cent hit after both of its co-chief executives, its chair, and its co-chair resigned.
The Australian-based health and wellness company said in December its turnaround strategy was showing glimmers of hope after an improvement in its bottom line.
Specialist lender Shawbrook was among the City’s winners after marking the biggest IPO of the year in October, raising £348m.
The bank – which was taken private in 2017 by Pollen Street Capital before returning to public markets – gained 30 per cent from its IPO price, enjoying the wider rally across the City’s banking stocks in 2025.
Hopes for IPOs to take off after stamp duty holiday
Whilst the final quarter showed an uptick in listings with the arrival of Beauty Tech Group and tinned tuna giant Princes, the London stock market’s IPO intake was hampered by macroeconomic turmoil.
“Uncertainty around tariffs and politics at home and abroad, mixed consumer and business sentiment, and lacklustre economic growth were the prime ingredients to dampen the appeal of undertaking an IPO,” Coatsworth said.
“Companies once again sat on the sidelines, nervous about taking the plunge with a stock market listing.”
But signs point toward a changing tide in 2026 following the introduction of the stamp duty holiday for new listings in Rachel Reeves’ second Budget, alongside the easing of interest rates and inflationary pressures.
Coatsworth added firms would now have a “firmer idea how to plan, in terms of taxes, costs and more” with the FTSE 100’s latest set of records showing “the UK is capable of rewarding investors handsomely.”
A number of firms are tipped for a float in London over the next year including book chain Waterstones, whose owner Elliott Management is said to be weighing up a float on either side of the Atlantic.
After spinning off the group’s tech arm, Octopus chief Greg Jackson said he would “love” for Kraken to list in the City but added the London Stock Exchange needs to be “banging the drum”.
“I would need to see more hustle from the London Stock Exchange (LSE) – they need to be bringing in more capital,” Jackson told the Press Association.
Meanwhile, Reeves has locked her sights on a batch of fintech floats in a bid to give a shot in the arm to the London market.
As part of the Treasury’s Financial Services Growth and Competitiveness Strategy, Reeves launched a fleet of new policies to galvanise listings, though efforts thus far have remained subdued.
Neobank Starling has become increasingly warmer to a US listing, whilst Klarna snubbed London to launch on the New York Stock Exchange last year.
The boss of AI-powered fintech Cleo told Morning Wire the London market needs dire action – such as merging with the Nasdaq – to turnaround future prospects.