2021 began with COVID-19 vaccine rollouts, a rebound of global economies and ample liquidity in the market hastened by government stimulus programs resulting in optimism for global IPO markets. Q4 2021 was the most active fourth quarter by deal numbers since Q4 2007, seeing a 16% (621) and 9% (US$112.2 billion) increase by both total IPOs and by proceeds respectively, compared to the fourth quarter of 2020.
All global markets experienced overall increases by both IPO volume and proceeds, but Europe, the Middle East, India and Africa (EMEIA) exchanges produced the highest growth, seeing a 158% increase by number of IPOs (724) and a 214% increase by proceeds (US$109.4 billion). The Americas remained hot as well, ending the year with 528 IPOs raising US$174.6 billion by proceeds, an 87% and 78% increase respectively. The Asia-Pacific region experienced relatively modest growth, resulting in 1,136 IPOs (28% increase) and raising US$169.3 billion by proceeds (22% increase).
“In 2021, capital markets provided strong yields and the investment activity at the Bucharest Stock Exchange maintained in an uncertain economic environment caused by the pandemic and political factors. On December 17, the total market capitalization on the main segment of the Bucharest Sock Exchange reached EUR44 billion, while gross Year-to-Date (YTD) returns of the BET index exceeded 27%. 2021 was a record year for the listing of shares and bonds. Corporate bonds prevailed in 2021, with 29 bond issues worth a total EUR932.5 million. BCR and Raiffeisen Bank listed the biggest bond issues (of EUR425.5 million and EUR326.6 million, respectively), followed by Autonom with a EUR48 million bond issue, Agricover Holding and Libra Internet Bank with bond issues worth EUR40 million each”, said Andrei Eftimie, Associate Partner, Capital Debt Advisory, Strategy and Transactions, EY Romania.
Romania also saw 23 share listings, of which three IPOs on the main market of the Bucharest Stock Exchange, worth a total EUR185.2 million: Transport Trade Services (TTS.RO) for EUR58.5 million, One United Properties (ONE.RO) for EUR52.6 million and Aquila Part Prod Com (AQ.RO) for EUR74.1 million.
Globally, the technology sector saw the highest number of IPOs (611) for the sixth consecutive quarter (since Q3 2020) and raised the highest proceeds (US$147.5 billion) for the seventh consecutive quarter (since Q2 2020). Health care raised the next highest number of IPOs by volume and proceeds, seeing 376 IPOs raise US$65.4 billion by proceeds. Industrials was close behind health care, with 310 IPOs raising US$63.1 billion by proceeds.
“2021 was the most active year for the IPO market over the past 20 years. Initial optimism from rebounding economies, COVID-19 vaccine rollouts, and rolling liquidity from government stimulus programs provided strong tailwinds. In Q4 2021, however, the winds shifted with the surfacing of the COVID-19 omicron variant, continuing geopolitical tensions, slowing IPO activity and increased market volatility. Whether or not IPO-bound companies press pause or forge ahead in 2022, they will need to satisfy investor demands for resilient growth strategies and well-articulated environmental, social and governance (ESG) plans”, said Paul Go, EY Global IPO Leader.
The Americas experienced a bullish year, bolstered by low interest rates, high liquidity, buoyant stock markets, improved consumer sentiment and overall optimism driven by the COVID-19 vaccine rollout in some countries. Overall, the region saw 528 IPOs raise US$174.6 billion by proceeds, an 87% and 78% respective increase. Health care remained the region’s top sector by volume with 172 IPOs raising US$32.2 billion by proceeds, however, technology was the top performer by proceeds with 152 IPOs raising US$72.2 billion. Moving into the new year, as the Americas markets continue to evolve and test the traditional IPO model, the structure and format of IPOs are set to continue to evolve, helping issuers better achieve their goals in pursuing a public listing.
The US IPO market remains red hot with 2021 overall on track to be the most active in the 21-year history of this report, with 416 IPOs raising US$155.7 billion by proceeds, representing an 86% and 81% YOY increase. US special purpose acquisition company (SPAC) IPOs claimed fame in 2021, with US exchanges seeing more SPACs than traditional IPOs. SPACs have shown remarkable resilience, and the US will likely continue to dominate the SPAC space.
Elsewhere in the Americas, Brazil’s B3 exchange experienced a record year with 45 IPOs raising US$11.9 billion by proceeds – the country’s highest activity level since 2007. Canada’s TSX and Venture exchanges continued to see a robust pipeline of deals as well, raising US$5.9 billion by proceeds from 47 IPOs.
“2021 was a record-setting year for the Americas IPO market. The surge in new public companies was driven by high valuations, an extended low interest rate environment and strong investor appetite for equities. As we head into 2022, there is cautious optimism that the equity market will remain healthy for new issuers to come to market. Companies looking to go public should continuously consider all options. While a traditional IPO is the most tested form of achieving a public listing, alternative structures are evolving and giving companies more routes to gain access to public markets”, said Rachel Gerring, EY Americas IPO Leader.
IPO activity in the Asia-Pacific region maintained a steady pace through 2021 with deal numbers (1,136) and proceeds (US$169.3 billion) rising 28% and 22% respectively YOY. While these gains are impressive, they are modest relative to the record-setting IPO activity that the Americas and EMEIA experienced this year. As for sectors, technology saw the highest number of deals (257) and raised the most proceeds (US$45.4 billion) through the year.
Europe saw gains with 485 IPOs (154% increase), raising US$81.1 billion by proceeds (195% increase). The Middle East and North Africa (MENA) also saw significant increases with deal numbers and proceeds rising 205% and 281% respectively (113 IPOs, US$11.0 billion). As economies in these areas rebound, oil prices remain favorable and companies with strong fundamentals continue to receive ample investor interest. In India, 2021 IPO activity increased 156% by deal number and 314% by proceeds YOY (110 IPOs, US$16.9 billion). Activity in the UK also remained strong, seeing a 223% increase in deals (97 IPOs) and an 81% rise by proceeds (US$21.2 billion).