London Stock Exchange Records Best IPO Quarter In 14 years
The London Stock Exchange has announced that in the first three months of 2021, the market managed to raise a whopping £5bn – the first time it has done so since 2007.
This comes despite the launch of Deliveroo’s IPO, which did not perform as well as many had anticipated, and has led to many industry experts calling it the year’s first ‘damp squib’. However, it looks as though its poor performance could be somewhat anomalous.
A number of high-profile IPOs, including Deliveroo’s and Trustpilot’s, resulted in the first quarter of 2021 having an exceptional boom period, and is a strong indicator that many investors who were naturally wary during 2020 are beginning to enter the market once again.
According to EY, the world-renowned financial firm, 12 IPOs played a part in raising an incredible £5.2bn, while eight smaller firms utilising the Alternative Investment Market (AIM) were able to garner around £440m.
This starkly contrasts performance at the beginning of 2020, where just three IPOs were placed on the primary market and two on AIM, attaining a grand total of £615m over the same period.
The ongoing vaccine rollout, as well as the government’s roadmap out of lockdown, are thought to be huge catalysts, giving investors, CEOs and company managers security and clarity that they haven’t been privy to for almost 18 months.
It is also worth highlighting that, prior to 2021 ending, there are still a number of major companies that are planning to list, which could see investments rise to ever greater levels.
For example, early indications suggest that when Darktrace – one of the world’s leading cybersecurity firms – finally goes public, it could do so with a value of around £4bn.
Meanwhile, EG Group, which specialises in fast food outlets and petrol stations, could have a listing close to £10bn, though whether it will list in 2021 is not yet certain.
It is also certainly worth highlighting that a number of other companies, such as Brewdog, have hinted that they may well list if the market conditions are right, and given that all signs point to positivity at the current time, we could well see an influx of ambitious companies commit to a London floatation over the coming months.