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The London stock market saw just 23 issuers listing in 2023, spelling a 49% decline on the 45 recorded in 2022 and represents the quietest year on record since 2010, EY data has revealed.
The 23 issuers in 2023 raised £953.7m in total, which is also a 40% drop from the £1.6bn raised in 2022. The largest IPO in 2023 was CAB Payments, raising £291.5m in July 2023.
In Q4 2023, there were no IPOs on the main market or Alternative Investment Market (AIM) as the London stock market continued to be affected by headwinds including rising inflation, interest rate rises and geopolitical tensions.
Scott McCubbin, UKI IPO leader at EY, said: “The stability of equity markets hinges on consistent conditions so whilst falling inflation and interest rate reductions may ease in the first half of 2024, the upcoming UK and US elections in the latter half might delay significant IPO activities until 2025.
“Although we may not see a rebound in IPO activity in 2024, there are reasons to be positive. The fundamentals of London as an attractive global listing destination remain strong, and pent-up demand for IPOs suggests we are likely to see an upturn in the market in the second half of the year as economic challenges continue to ease.”
He added: “The FCA’s proposed revisions to simplify the UK listing regime – particularly the increased emphasis on disclosure to empower investor decision-making – should also provide a boost and have been broadly welcomed by the market.”
Global IPO volumes fell 8% in 2023, with proceeds down by 33% compared with 2022. In total, 1,298 IPOs raised $123.2bn (£96.7bn).
Meanwhile, technology IPOs continued to have the highest proceeds, raising $32.2b (£25.2bn). However, the sector saw declines driven by subdued investor reception to high-profile tech IPOs in the US and GenAI startups still being in the venture capital stage.
The industrials sector had the most deals in 2023 with a total of 265, whilst the consumer sector was the only sector to increase by both IPO volume and proceeds year-on-year.
Debbie O’Hanlon, UKI Private Leader at EY, added: “Whilst market conditions remain challenging, appetite for IPOs is high and smaller deals are emerging with improved after-market performance.
“With many governments now taking measures to boost IPO activity – particularly in high-growth economies – it’s essential that IPO candidates focus on building fundamentals and managing price expectations to be ‘IPO ready’ when the window does open in 2024.”
