London IPO value drops 94% in first half of 2022

IPO activity on the London Stock Exchange’s main market and the Alternative Investment Market (AIM) saw a collective 45% decrease in deal numbers and a 94% drop in proceeds in the first half of 2022 compared to H1 of 2021, according to a report from EY.

Global IPO activity followed a similar path and fell in H1 2022, with a 47% decrease in deal numbers and a 59% drop in proceeds compared to H1 2021.

In London, 26 issuers raised only £595 million in the first half of 2022, compared to 47 issuers raising £9.4 billion in the same period a year before.

In the second quarter of 2022, the main UK market listed six IPOs which raised £192 million in total, whilst AIM saw just one admission, raising £6 million.

UK IPO performance during Q2 of 2022 contrasted starkly with the same period in 2021, when there were 12 IPOs on the main market and 13 on AIM, raising a combined total of £3.8 billion – a value 19 times higher year-on-year.

Scott McCubbin, EY UKI IPO Leader, said: “The London IPO market has experienced a very difficult start to 2022.

“There is a perfect storm of geopolitical pressure creating a challenging macroeconomic landscape, which are compounded by inflationary pressures focused on high energy and commodity prices leading to associated interest rates rises.

“We expect a weak IPO market for the remainder of 2022 due to these challenging conditions.

“However, the pipeline of IPOs is healthy, with a number of delayed IPOs because of the turbulent market conditions in the first half of the year.

“This provides a more positive medium to long-term outlook, although the timing of a rebound is hard to predict given the uncertain geopolitical and macroeconomic landscape.”

Global IPO markets reported 630 IPOs in H1 of 2022, raising $95.4 billion. EY said this represented a 58% valuation drop year-on-year and is 46% lower in terms of the number of IPOs.

Shanghai was the leading global exchange in terms of IPO proceeds in H1 0f 2022, hosting 69 IPOs and raising over $32.6 billion in the process, representing a 46% increase in proceeds when compared to the same period in 2021.

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.