The UK IPO market is showing signs of recovery, with increased activity levels and more firms preparing to list on the London Stock Exchange. According to Peel Hunt’s “IPO Speedometer,” which measures the market’s health on a scale from 0 to 60mph, the score has risen to 27mph from 24mph in April. This places the market in “second gear,” indicating it is “selectively open.”
The recovery in IPOs, which initially started in Europe, is now spreading to the UK. Despite the number of announced or priced UK IPOs still being relatively small, the gradual increase in activity levels is a positive sign. Peel Hunt expects more UK IPOs by the second half of 2024 and anticipates a broader market reopening by the first half of 2025.
Recent announcements from companies like Raspberry Pi and Aoti have contributed to this optimistic outlook. Raspberry Pi is seeking a £500 million valuation, and Aoti is aiming for a £160 million valuation on AIM. The performance of these IPOs will be crucial for the broader market sentiment.
London’s stock market has faced challenges in recent years, including a lack of significant IPOs and firms moving their listings overseas. The last notable IPO was Deliveroo in 2021, which did not perform well. However, the potential listing of Shein, a fast fashion giant, could be a significant event for the London market. Shein is considering a £50 billion listing, which would be one of the largest in the UK’s history. Despite controversy over its environmental practices and labor allegations, Shein’s IPO could boost the market.
In summary, the UK IPO market is showing signs of recovery, with increasing activity levels and potential high-profile listings on the horizon. The market remains selectively open, but there is growing confidence in a broader reopening in the near future.
(Source: City AM)