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EY Global IPO Trends Q1 2025

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The global IPO market saw a 20% year-over-year (YOY) growth by value, despite profound uncertainty amid significant geopolitical shifts.

In brief

  • In major IPO markets, profitable IPO surge isn’t fully translating into market enthusiasm.
  • US policy shifts propel global defense spending to new highs, fueling Aerospace and Defense IPO momentum.
  • Artificial intelligence (AI) a central part of company narratives for Technology, Financials and Health and Life Sciences IPO candidates.

Global IPO markets in the first quarter of 2025 have been marked by profound uncertainty, as two major market disruptions and a series of complex crosscurrents shape investor sentiment. The far-reaching policy agenda of the new US administration suggests the potential for tectonic shifts in geopolitical and regulatory frameworks, trade and tax policies, and immigration strategies. This will bring both opportunities and risks worldwide. Meanwhile, the rise of more cost-effective artificial intelligence (AI) models has intensified competition, leading to increased investor uncertainty. 

Overall, the global IPO market showed resilience in Q1 2025, posting year-over-year (YOY) gains in volume and value, despite significant market disruptions.

In major IPO markets, profitable companies are rising without the expected market enthusiasm

In Q1 2025, the share of new IPOs posting profits surged across most regions from a year ago, except ASEAN and Japan. Although the Chinese mainland has enforced strict regulatory measures to enhance IPO quality, the broader uptick in profitable new debutants across markets signalled continued investor appetite for financially robust players. In particular, the percentage of profitable companies listed in the US and India surged this quarter over Q1 2024, driven by robust demand, enhanced pricing power and efficient cost management. 


Despite softened monetary policies in most economies, interest rates remained elevated. Heightened market uncertainty, driven by trade tensions, regulatory shifts and the disruptive rise of AI players, have further prompted investors to be more selective and seek more secure and predictable returns. IPO candidates are now compelled to showcase more robust financial performance and value creation potential to attract investment. 

Among the same IPO cohort, only the US and Chinese mainland have seen median first-day IPO returns increase by 3-5% and current returns rise by approximately 10% in Q1 2025 compared to Q1 2024. Despite a continued uptick in US IPO returns this quarter, less than half of the cohort posted gains as a mixed bag of high-quality and lower-tier companies went public, underscoring a selective investor base prioritizing value and stability over speculative growth. Other markets, including Hong Kong, ASEAN, Japan, South Korea, Europe, the Middle East and India, all saw declines—a trend also mirrored in current returns in these markets. This highlights a selective resilience rather than broad-based positive IPO performance. 

In Q1 2024, a few markets saw a higher percentage of IPO companies with positive first-day returns than the percentage of profitable companies. However, investors now demand more than just earnings strength from IPO companies. In Q1 2025, positive IPO returns — both on debut and currently — trail the percentage of profitable listings across most major markets. 

Some profitable companies offered discounted IPO prices, hinting at cautious outlooks, which sparked initial selling pressure and softened demand, with shares briefly dipping below their offer prices amid recent market turbulence. This showed that even profitable firms need stronger IPO readiness to succeed post-launch, particularly as new dynamics, such as trade war, risks to inflations and economies, undermine market stability and erode investor confidence.


The full EY Global IPO Trends Q1 2025 report provides deeper analysis and insights. Download the PDF

Aerospace and Defense IPO momentum picks up in light of US policy shifts

Policy uncertainty, once seen as a deterrent to growth, is now being viewed as a catalyst for accelerated growth in certain sectors deemed critical to national security. The US, as well as countries in Asia (including India), Europe, and the Middle East, all saw increases in defense budgets in response to escalating geopolitical threats. 

Aerospace and Defense companies are increasingly growing in the private domain and eyeing public markets to broaden their capital bases. There are currently more than 3,400 private defense sector companies, with most backed by VCs, while those funded by PE firms typically command significantly higher median valuations. Additionally, about 90 companies in this sector are in the IPO pipeline, over 10 in IPO registration and more than 300 in the public market. Among the 90 IPO candidates, more than half are targeting US IPOs, with most cross-border deals coming from Europe.

Public listings within the sector have consistently grown over the past three years, with IPO proceeds surging since 2022, including mega IPOs like StandardAero Inc., listed last year in the US.

This convergence of policy tailwinds, market enthusiasm and rising valuation is reshaping the sector, creating significant opportunities for expansion and capital market activity. Despite recent market turmoil, we continue to expect an uptick in listing activity in this sector, unlocking capital for further expansion and innovation.


AI transforms IPO landscape as firms race to harness AI for growth

AI has become a transformative force in the business world, significantly influencing companies’ growth trajectories. This is becoming especially apparent for companies navigating the IPO landscape. From enhancing operational efficiencies to reshaping market strategies, AI's integration into business models is redefining how companies prepare for and execute public offerings. 

Retail investors are increasingly drawn to stocks expected to capitalize on AI, particularly those using it to unlock new revenue opportunities. For example, generative AI (GenAI) is unlocking fresh revenue in media and marketing through AI-generated ads and personalized customer experiences. FinTech IPOs are tapping into AI-powered trading and risk assessment, driving high-margin growth. Health care firms are accelerating drug discovery, shortening R&D timelines and securing milestone payments worth billions. AI’s cross-industry applications are also expanding, with autonomous logistics in mobility IPOs promising lower transportation costs and new service models.

Company filings reveal how IPO companies are harnessing AI to attract investor interest. Across the 2024 to Q1 2025 IPO cohort, companies in the Technology, Media & Entertainment and Telecommunications (TMT), Financials, and Health and Life Sciences sectors most often highlighted AI in corporate filings, with AI appearing in an estimated 40%-50% of disclosures. Among the 50 largest IPOs in Q1 2025, companies mentioning AI frequently emphasized its role in sparking innovation — particularly in Health and Life Sciences applications like drug discovery — while also noting its contributions to advancing digital transformation, strengthening cybersecurity measures and streamlining industrial operations.

Meanwhile, companies are advancing GenAI innovation, potentially, at lower costs, defying the belief that only deep-pocketed tech giants can dominate the space. Faster adoption could amplify AI’s role in global economic growth, reshaping competitive dynamics. AI is no longer just a buzzword but an increasingly important theme in company strategies and investor narratives. In a volatile geopolitical climate, AI-enhanced agility is proving crucial, helping firms navigate tariff shifts and supply chain disruptions. As markets navigate uncertainty, the race to harness AI for resilience and growth is only accelerating.



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IPO pipelines are filling up, with Industrials and Real Estate, Hospitality & Construction the most confident sectors

While IPO pipelines across all sectors surged YOY in Q1 2025, completed listings rose in only half the sectors from the same period last year, curbing optimism with caution.

 

The Industrials and Real Estate, Hospitality and Construction sectors led the pack, demonstrating confidence in IPO pipeline growth and completions, respectively. Construction notched a record Q1 peak since 2001, driven largely by India.

 

The Health and Life Sciences sector also demonstrated strength in public offerings, marked by a 62% YOY expansion in the build-up of new candidates. This, alongside a 14% YOY increase in completed IPOs, signals heightened interest in public listings. The Health sector, in particular, saw 11 IPOs in Q1 2025, the highest first quarter recorded in over two decades boosted once again by India.

 

Activity in TMT IPOs rebounded in Q1, fueled by strong US growth, and larger technology deals in India and South Korea.

 

With growing pipelines but shrinking listings, the Consumer, Energy, Financials, and other sectors navigated a complex Q1 2025 with caution. This split dynamic signals pent-up potential stalled by a volatile environment, with companies eyeing markets yet restrained by a late-March crash and soaring volatility. 

IPO trends sector IPO growth dynamic
IPO trends sector IPO growth dynamic

How EY can Help

  • IPO readiness assessment

    With decades of experience helping companies go public, our IPO readiness assessment team can help you get ready for the big day — and beyond. Learn how.

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Outlook and advice to IPO candidates 

Some private sector and market-based measures of inflation expectations have risen, and the tariffs will only further fuel inflationary pressures in the US and around the world. The direction of monetary policy is highly uncertain, with some central bankers likely to favor an accommodative stance to alleviate demand destruction from tariffs, and others maintaining a restrictive stance to minimize the risk of persistently elevated inflation. Coupled with supply chain disruptions across regions and trade uncertainty from US tariffs, some economies face slower growth prospects — particularly in EU countries like Germany and major US trade partners such as the Chinese mainland, where tariff risks loom large, despite modest GDP gains projected for 2025. 

 

Caught in the uncertainty, some companies initially planning to list in 2025, particularly those targeting the first quarter of the year, have delayed their IPOs to later quarters or even early 2026. Those that have already listed in the first quarter are demonstrating varied aftermarket performance. The expected IPO surge in this volatile market may slow down soon. Private equity firms, for instance, entered the year with a robust pipeline of potential new offerings, but will be more inclined to seek strategic buyers and to pursue secondary transactions. 

 

Against the buffeting headwinds of geopolitical and trade tensions, a cooling economic outlook, rising inflation risks and short-term market volatility, exacerbated by recent stock market plunges, there are rays of hope in the tailwinds of a strong pipeline in almost all sectors and targeted government support to key sectors.

 

As market participants steer their way through the heightened uncertainty, those looking to go public this year will need to be well-prepared and adopt a more agile approach to help ensure readiness for their IPOs so they can move through the narrow window that opens when volatility falls and market conditions stabilize.

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Previous IPO reports

Summary

The global IPO markets are showing some increased strength despite the uncertain geopolitical backdrop, with increasing profitability, investment into the aerospace and defense sectors, and continued disruption and excitement around AI. 

 

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    George Chan
    EY Global IPO Leader; EY Greater China Assurance COO
    Passionate about helping clients excel in this transformative age. Keen reader. Movie fan.

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