IPO Values Up But Deal Volumes Down in Q1 2024 – EY Global IPO Trends Report

• 287 deals globally in the first quarter of 2024 raising US$23.7 billion
• Global IPO values up 7% year-on-year, but the volume of deals is down 7%
• Many IPOs beat their pricing and continue to trade at a premium
• Artificial Intelligence experiencing significant growth in private domain

Dublin, 11 April 2024: The global IPO market began the year on a cautiously optimistic note with 287 deals raising a total of US$23.7 billion in the first quarter of 2024, according to the latest EY Global IPO Trends Q1 2024 report. IPO deal values were up 7% when compared to the first quarter of 2023, while the total number of deals was down 7% over the same period.

The Americas and EMEIA IPO markets had a bright start in 2024, increasing global proceeds. However, the Asia-Pacific region started on a weaker note, weighing down the overall global volume of IPOs. Encouragingly, the majority of key IPO markets witnessed a significant number of newly issued IPOs whose current share prices surpassed their offer prices – indicating an improvement in valuations and pricing levels and, potentially, reflecting growing confidence among issuers and investors.

The promise and potential of Artificial Intelligence (AI) – particularly Generative AI – is leading to significant investment into this rapidly expanding area. However, with the majority of AI and AI-associated businesses either still in the seed or early stage of funding rounds – or part of very mature companies –  its impact is not yet being felt in the IPO market. As many of these companies mature in the private domain we may see a surge in IPOs in future years.

An IPO is one of the pinnacle achievements for private equity (PE) firms, serving as a public showcase of their acumen and a defining milestone in their growth journey. In Q1 2024, approximately 10 PE-backed IPOs came to the market, five of which were featured among the top 10 global IPOs, a testament to their significant market presence.

Fergal McAleavey, EY Ireland Corporate Finance Partner, says:

“The global IPO market has shown welcome signs of vigour in the first quarter of 2024, with an upswing in IPO activity, deal values up compared to 2023 and many IPOs outpacing their list prices on debut. Despite the restrained overall market activity in recent years, there's an uptick in enthusiasm from both IPO issuers and investors, as market dynamics evolve and a more welcoming landscape for public listings​ emerges globally.

“Positively, inflation continues to decline and interest rate cuts from Central Banks globally are more a question of ‘when, not if’. This could attract investors back to IPOs by improving liquidity and return outlooks. However, the global economy remains on a soft growth trajectory in 2024, with developed markets likely to see modest growth while emerging markets stay on a firmer growth path.

“IPO activity in Ireland remains subdued, although the hope is that improvements in global market conditions, expected interest rates cuts and a number of recent high-profile IPOs will  have a positive, knock-on effect domestically for companies considering going public and help spur activity. It's crucial to note however, that today's thriving companies have a much wider range of options and greater access to private funding than in previous years. This abundance of private equity capital, often referred to as 'dry powder,' is so substantial that an IPO, while still a viable route for businesses, is no longer the exclusive pinnacle of success it once was.

“Globally, IPO candidates are being influenced by the pivot in investors' preference over recent times toward proven profitability in an altered interest rate landscape, and are doing this while facing the intricate dynamics of an intensified geopolitical climate and the momentum generated by the potential of AI. To succeed in this shifting environment, IPO prospects must remain flexible and prepared to seize the right moment for their public debuts.”

Overall regional performance: Americas and EMEIA recovering and Asia-Pacific plunging

The global IPO market has experienced significant shifts in geographical composition, driven by ongoing macroeconomic and geopolitical dynamics.

The Americas continued to exhibit strong performance in IPO activity compared with both the previous quarter and Q1 2023, with 52 deals and US$8.4billion in proceeds, up 21% and up a whopping 178%, respectively, YOY. Each of the top seven deals in Q1 2024 raised over US$500m, versus just one in Q1 2023. The US, after experiencing a 20-year low in proceeds in 2022, has finally witnessed a noticeable recovery in the first quarter of the year, riding on the wave of the market rally from last year.

Driven by a subdued IPO market sentiment across the region, Asia-Pacific IPO activity in Q1 recorded 119 deals and US$5.8b in proceeds, down 34% and 56% YOY, respectively. This decline was especially sharp in Mainland China and Hong Kong, with the number of deals decreasing more than half and deal size falling by nearly two-thirds. Both markets have experienced a consistent decline in IPO activity over the past few years. There have been only 10 IPOs so far this year in Hong Kong, with two exceeding US$100m in deal size, marking a historic low since 2010 by proceeds. Japan was the only market in Asia-Pacific to see a slight increase in deal count in the first quarter, with the Nikkei Index hitting an all-time high in February.

The EMEIA IPO market witnessed impressive growth at the start of the year, launching 116 IPOs totaling US$9.5b in the first quarter, up 40% and 58% YOY, respectively. This surge was attributed to larger average deal sizes from IPOs in Europe and India, which enabled EMEIA to maintain first place in global IPO market share by proceeds since Q4 2023. Since 2019, India has rapidly gained prominence, particularly in the number of IPOs, and has now emerged as a standout performer.

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Notes to editors

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About the data

The data presented here is available on ey.com/ipo/trends. Q1 2024 refers to the first quarter of 2024 and covers completed IPOs from 1 January to 18 March 2024, plus expected IPOs by 31 March 2024 (forecasted as of 18 March 2024). All data contained in this document is sourced from Dealogic, Mergermarket, Pitchbook, Capital IQ and EY analysis unless otherwise noted. The Dealogic data in this report are under license by ION. ION retains and reserves all rights in such data. SPAC data are excluded from all data in this report, except where indicated.