How IPO candidates can navigate uncertain and selective markets

The implications for IPO candidates come into focus at the regional level, where a variety of pressures are playing out.

1. Geopolitics, governmental regulations and policies are influencing capital allocation

Rapidly shifting geopolitics have created tailwinds for certain sectors, including energy and aerospace and defense, while governmental and regulatory policy shifts have opened the door for digital asset and related infrastructure companies. At the same time, certain secular growth plays, like artificial intelligence (AI) infrastructure and some healthcare subsectors, continue to see encouraging levels of demand.

In EMEIA, the ongoing tension is highly disruptive to markets and the economy in general. The conflict in the Middle East has driven energy prices up and regional equity markets into retreat, creating shockwaves throughout the capital markets. At the same time, these forces are propelling the defense sector, which accounted for the largest global IPO of Q1 2026. In Europe specifically, more defense IPOs are expected to follow, underpinned by massive government spending and North Atlantic Treaty Organization's (NATO) push toward the 5% GDP defense spending target, including 1.5% for critical infrastructure investments. “The year started strong with the largest IPO globally emanating from Europe,” says Martin Steinbach, EY EMEIA IPO Leader. “With AI maintaining its enthusiasm and investors setting their sights on aerospace and defense and infrastructure, 2026 is shaping up to be concentrated across fewer sectors addressing a handful of key themes.”

In Greater China, the situation in the Middle East has also weighed on market sentiment, particularly in Hong Kong, where international capital flows are often exposed to global risk events. The rising geopolitical tensions in Q1 resulted in widespread market volatility, delaying the launch of some IPOs, while others have been forced to list below their targeted pricing expectations amid a more “risk-off” environment. In general, geopolitical fragmentation has been impacting listing strategies. Chinese companies seeking global expansion increasingly prefer Hong Kong as a gateway to international capital, using “H-share” listings to help fund supply chains outside of the mainland. Terence Ho, EY Greater China IPO Leader notes that over 100 A-share companies have applied for dual H-share listings, a direct response to supply chain diversification pressures.

2. The bar for new listings has been rising

Across the globe, more of today’s successful IPO companies are coming to market with strong cash generation, clearly defined growth prospects and greater operational maturity. “Companies are staying private longer, producing larger, more scaled businesses with more years of growth before approaching the public markets,” notes EY Americas IPO Leader Rachel Gerring. The extended private incubation means these “haves” are more likely to arrive with the infrastructure, governance and investor credibility that help pave the way for success.

3. IPO windows will always be something for issuers to navigate

The depth and actionability of the IPO pipeline can be uncertain. “In Greater China, more than 400 companies have active listing applications on the Hong Kong Stock Exchange,” says Ho. “However, we estimate 180 companies will complete IPOs in 2026, gated primarily by the pace of China Securities Regulatory Commission (CSRC) regulatory approval.” In Greater China, the path to listing operates through two separate filters. The regulatory approval window, managed by the CSRC, plays a central role in determining whether and when a company can proceed. The market window shapes pricing and investor appetite. Of the two, the regulatory gate has historically been more decisive though both carry real uncertainty. Companies aligned with government strategy tend to move through the regulatory process faster.

In the Americas, the back half of 2026 is expected to see the beginning of several of the largest IPOs in history. As a result, other potential IPO hopefuls will need to maintain flexibility in their timetables to accommodate these events. In EMEIA, IPO timing increasingly depends on the ability to find the right moment amid overlapping uncertainties and the possibility to back the IPO with cornerstone investors. “In nervous markets, size and a high-quality equity story matter, because larger companies have broader investor reach and greater insulation from liquidity shocks,” says Steinbach.

4. Dual-track processes are proliferating

Dual-track processes – when a company simultaneously pursues an IPO and a sale – have long been used by companies to preserve their options and create tension in their processes. In times of uncertainty, companies are more likely to pursue dual-track processes. In the Americas, the prevalence of dual-track processes has grown, particularly among sponsor-backed companies where holding periods have lengthened over the past few years. In EMEIA, the M&A decision is becoming more attractive for would-be IPO issuers as strategic buyers and financial sponsors are drawn to high-growth European businesses in today’s market. In Greater China, early-stage investors and other interested parties are increasingly influencing exit strategies.

Not all companies pursue dual-track processes as the resource demands are significant and certain companies are considered too large to be likely sale candidates, but for the right company, a dual-track process can become the difference in whether a strategic transaction gets done.

5. External shocks are prevalent and the market is adapting

We are in what the global EY organization calls a NAVI world – where change is increasingly nonlinear, accelerated, volatile and interconnected. Old geopolitical rules and norms are seemingly discarded before new ones have fully taken shape, creating a heightened level of uncertainty for businesses across sectors. For IPO markets, perhaps the most striking development is not the disruption itself, but the shift in how companies and their stakeholders are responding. Across the globe, the conflict in the Middle East has impacted markets, but thus far markets have demonstrated a level of resilience that supports a sense of optimism among key market participants around the remainder of the year. As the market windows open and close, it is critical for companies to be positioned to move quickly when market conditions align.

A growing number of high-profile hyper-jumbo companies are signaling intentions to go public through mega-IPOs. We sat down with Mark Schwartz, EY Americas IPO and SPAC Advisory Leader, to discuss what’s driving this phenomenon, what it takes to bring these companies public and what these IPOs could mean for other IPO hopefuls.

What are hyper-jumbo companies and mega-IPOs?

Neither of these terms really has a formal definition, but for these purposes a hyper-jumbo company is valued in the private markets at a few hundred billion dollars or more (a “multi-centicorn,” in some circles), while a mega-IPO is an IPO that raises roughly $US20b or more in proceeds. Regardless of where you set these cutoffs, these companies are in their own category, having grown to staggering sizes outside of the public market eye. And they have the potential to raise enormous amounts of capital alongside their stock market listings.

These companies must have been treated well in the private markets to have stayed there through all the growth. Why would they go public now?

Many of these companies have been extremely well funded by private equity, venture capital and strategic investors in the private markets. But we seem to be approaching an intersection in their development and the market generally: On the one hand, these companies have grown in private hands to become larger than most of the largest listed companies; on the other hand, the IPO market has recovered to a point where seeking some or all of the traditional benefits of a public listing (e.g., liquidity for shareholders, public currency for acquisitions and retention) helps them competitively and simply makes sense at this stage in their lifecycle.