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The proceeds raised from European IPOs in 2023 fell by 35% compared with the previous year with global macroeconomic and geopolitical uncertainty contributing to a soft market, according to PwC’s latest IPO Watch.
There were 107 IPOs across Europe raising €10.2bn (£8.7bn) in 2023, a fall of €5.4bn (£4.6bn) on the previous year, which saw €15.6bn (£13.3bn) raised from 102 IPOs.
The last quarter saw €1.7bn (£1.45bn) raised from 28 IPOs across Europe. The largest listings include the €1.9bn (£1.62bn) IPO of the Romanian electricity producer, Hidroelectrica, the €935m (£798.5m) IPO of the German medical packaging company, SCHOTT Pharma, and the €605m (£516.7m) IPO of the German green hydrogen solutions provider, Thyssenkrupp Nucera.
In addition, the €507m (£433m) Special Purpose Acquisition Company (SPAC) IPO of Admiral Acquisition on the London Stock Exchange made the top five IPOs in Europe for 2023.
According to PwC, stronger than expected equity markets and reduced volatility have created a supportive environment for follow-on equity issuance, which showed resilience during 2023, with proceeds increasing by 8.7% to €6.4bn (£5.47bn).
Kat Kravstov, capital markets director at PwC UK, said: “As investor sentiment turned more positive towards the end of 2023, major equity indices in the US and Europe have defied expectation producing solid returns. Secondary issuance has remained strong, but the IPO market is yet to catch up.
“As we look towards 2024, there are positive signs pointing to IPO market recovery, supported by demand for new investment opportunities and exits, leading to a growing pipeline of potential issuers. IPO windows are, however, expected to be tight and planning for optionality will be critical for IPO candidates.”
Richard Spilsbury, capital markets partner at PwC UK, added: “Despite the success of further offers and volatility trending below historical norms for much of the year, providing ripe conditions for companies to tap into the market, IPOs failed to gain any meaningful traction.
“The valuation gap persists, with private equity sponsors reluctant to accept lower returns to appease institutional and retail investors who in turn are unwilling to support valuations seen in the post-covid flurry. There is, however, cautious optimism for the year ahead after several significant IPOs in 2023 are now performing well in the aftermarket.”
