Overall regional performance: 2023 wasn’t the year the regions thought it would be
While the number of Americas IPOs in 2023 was up 15% compared with 2022’s muted level, proceeds were up by nearly three times due to several high-profile deals. In total, 153 deals raised US$22.7b, with 132 of them on US exchanges. The region had seven deals that raised over US$500m in 2023 versus just four in 2022, but smaller-sized IPOs continued to dominate IPO activity on US exchanges. Overall, the increase in IPO volumes compared to last year sparked optimism in the market in 2023 for a broader IPO market recovery. Despite an optimistic environment, investors remain selective, calling for strong fundamentals and preparedness.
This year, 732 companies went public in Asia-Pacific raising US$69.4b, a YOY fall of 18% and 44% respectively. Facing economic and geopolitical headwinds, 2023 was challenging for Asia-Pacific’s IPO markets, with the two powerhouses of Mainland China and Hong Kong continuing to decline in volume and value. However, Mainland China remained a vital source of IPO funding, contributing over 40% of global proceeds in 2023. In the Asia-Pacific IPO market, well-capitalized companies backed by private equity and venture capital in the environmental, social and governance (ESG) and technology space can wait until valuations improve. Realistic pricing and post-IPO performance may encourage some of these companies that are prepared for IPO with strong governance and a good equity story to list in 2024.
The EMEIA IPO market is on its path to recovery, with a 7% rise in volume, even with a 39% decrease in proceeds. This is on the back of large deals from MENA, heightened activity in India and CESA as well as a few high-profile cross-border IPOs to the US. This region finished the year with 413 deals, raising US$31.1b. And, even though five of the world’s largest 10 deals were from EMEIA, the region had a greater number of smaller IPOs than large ones compared with 2022, hence the fall in total proceeds. MENA continued to dominate the top 10 EMEIA IPOs in 2023, with half of the IPOs from this geography. Overall, in EMEIA, the outlook for 2024 is optimistic but cautious, given an unpredictable market environment. In various countries, governments and regulators are taking steps to stimulate capital markets to boost investment in disruptive innovation.
2024 outlook: candidates must be prepared
Enthusiasm for IPOs is high, and smaller deals are emerging with improved after-market performance. While many governments are taking measures to boost IPOs, activity is particularly strong in high-growth economies. Before monetary policy eases and geopolitical climate stabilizes, IPO candidates should keep their eyes on building fundamentals and managing price expectations to capitalize on the fleeting windows as 2024 progresses.
Globally, moderating inflation and potential 2024 interest rate cuts could attract investors back to IPOs, by improving liquidity and return outlooks. However, sustained geopolitical instability may undermine confidence. Broadly, the year ahead hinges on an improving macroeconomic backdrop for IPO revival, as companies eagerly await more favorable market conditions to widen IPO windows.
IPO candidates looking to go public in 2024 will need to be well-prepared. Key factors to consider are: inflation and interest rates, government policies and regulations, recovery of economic activities, geopolitical tensions and conflicts, ESG agenda, and global supply chain. All options should also be considered, from alternative IPO processes (direct listing or dual and secondary listings) to other financing methods (private capital, debt or trade sale).
Subscribe to the EY Global IPO Trends
Be the first to receive each quarterly update when it becomes available.
To get more insight into the steps companies need to take to maximize their chances of IPO success, download our Guide to going public (pdf).
Previous IPO reports
Summary
The 2023 global IPO market saw continued shifting dynamics, with improved sentiment in Western markets balanced by a challenging market in Asia-Pacific. Globally, proceeds fell by a third compared to 2022, though deal volumes increased in the Americas and EMEIA.
Companies considering an IPO in 2024 need to focus on thorough preparation, considering factors like inflation, interest rates, government regulations, economic recovery, geopolitical tensions, the ESG agenda, and global supply chains. They also need to show resilience, demonstrate strong fundamentals and manage price expectations to prepare for fleeting IPO windows in 2024.