Western IPOs plummet in value as war in Ukraine triggers volatile conditions for businesses
The value of initial public offerings (IPOs) in the US and Europe has tumbled 90 per cent this year amid conflict in Ukraine, with rising inflation and interest rates forcing businesses to shelve plans to go public.
In the first five months of this year, 157 companies raised a total of $17.9bn, compared with 628 that raised $192bn in the same period last year, according to data from Dealogic first cited in The Financial Times.
On a global basis, the value of IPOs has dropped 71 per cent — from $283bn to $81bn — over the same time period, and the number of listings has fallen from 1,237 to 596.
The figures indicate the issuance slump in the first quarter of 2022 – which was triggered by Russia’s initial invasion of Ukraine – has not eased.
Volumes are also set to be sharply down year on year at the end of the second quarter later this month.
By contrast, the first three quarters of 2021 were the busiest period ever for listings, as companies rushed to go public after putting plans on hold during the coronavirus pandemic.
However market volatility, the war in Ukraine and the threat of global recession have made companies much less willing to do so this year.
Several major IPOs in preparation could be completed by the end of the year, such as Haleon, a consumer health joint venture from pharma giant GlaxoSmithKline.
It has sought regulatory approval to bring Haleon to market this year, in what could be the largest listing in London for a decade.
Earlier this year, US insurer AIG filed for a long-expected IPO of its life and asset management business that could value the unit at more than $20bn.
Volkswagen is also planning a €20bn partial float of Porsche this year.
However, there is also the possibility many planned IPOs will be pushed back into 2023 as conditions take time to improve.
Among the 10 highest-valued IPOs this year, just two were listed on US or European exchanges.
Private equity group TPG raised $1bn on the Nasdaq in January, while Norwegian oil and gas producer Vår Energi raised $880mn in Oslo.