Professional rock climber Joe Kinder lunging for a hand hold on a steep over hanging rock wall while both feet are peeled away from he rock due to the difficulty of the move in South West Utah. He is high above ground and the rolling hills of the desert can be seen behind him and off in the distance.
Professional rock climber Joe Kinder lunging for a hand hold on a steep over hanging rock wall while both feet are peeled away from he rock due to the difficulty of the move in South West Utah. He is high above ground and the rolling hills of the desert can be seen behind him and off in the distance.

EY Global IPO Trends Q2 2024

How can you adapt your IPO strategy in a dynamic market?

Global IPO divergence widens as Americas and EMEIA surge while Asia-Pacific slows.

In brief

  • In the first half (H1) of 2024, global IPO volumes fell 12%, with proceeds down by 16% year-over-year (YOY).
  • EMEIA regained the No. 1 global IPO market share by number for the first time in 16 years.
  • Industrials led the way in number of IPOs with technology raising the most capital.

Globally, in the first half (H1) of 2024, there were 551 listings raising US$52.2b in capital, a 12% decrease in the number of IPOs and a 16% drop in proceeds raised YOY. This result is mainly due to a slowdown in Asia-Pacific IPO activity with the Americas and Europe, the Middle East, India and Africa (EMEIA) seeing robust growth in H1. These and other findings are available in the EY Global IPO Trends Q2 2024, a quarterly report analyzing global IPO data to determine market trends and outlook for the year ahead.



The industrials sector took the lead in number of IPOs with 115 (21%) listings, primarily fueled by strong activity in India. Meanwhile, the technology sector outperformed in terms of capital raised, amassing an impressive US$10.8b (21%) in IPO proceeds, with the US securing much of these funds. 

There was a leap in large Private Equity (PE)/Venture Capital (VC)-backed IPOs, with the proportion of IPO proceeds from such offerings rising from just 9% in the first half of 2023 to 41% in H1 2024. This trend was particularly pronounced in the Americas, where 74% of the IPO proceeds were from PE/VC-backed companies.

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The full EY Global IPO Trends Q2 2024 report provides deeper analysis and insights.

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Professional rock climber Joe Kinder lunging for a hand hold on a steep over hanging rock wall while both feet are peeled away from he rock due to the difficulty of the move in South West Utah. He is high above ground and the rolling hills of the desert can be seen behind him and off in the distance.

Americas and EMEIA gain ground while Asia-Pacific activity continues to slow 

During H1 2024, there was a strong appetite for equity offerings in both the Americas and EMEIA regions, buoyed by favourable stock market performance, improving IPO valuation levels and growing investor enthusiasm for new offerings. In the Americas, there were 86 IPOs with proceeds of US$17.8b, an increase of 12% and 67%, respectively, YOY.

The EMEIA region has made a remarkable comeback in H1 2024, achieving its highest global market share by number since the 2008 Global Financial Crisis, accounting for an impressive 45% of total deal volume and 46% of value. This impressive performance was spurred by major European listings indicating that more larger companies perceive the current market condition as an optimal IPO window. India also experienced a significant surge, accounting for 27% (152) of global IPOs by deal volume, up from 13% (81) in the same period last year.


The Asia-Pacific region, once a hotbed for IPOs, has seen its market sentiment dampened by a confluence of headwinds, including geopolitical tensions, elections, economic slowdown, heightened interest rates and a drought in market liquidity, which led to investor caution. The region witnessed a prolonged slowdown in H1 2024, with a mere 216 IPOs listed and US$10.4b raised. This lackluster performance represents a staggering decline of 43% and 73% by volume and value YOY, respectively.


The global IPO market reflects the broader economic backdrop, while seeking new balance amid the geopolitical and election complexities. As the pendulum of opportunity swings toward the developed Western economies, the Asia-Pacific region faces headwinds that test its tenacity. Companies contemplating IPOs need to show heightened adaptability and resilience to make well-informed strategic decisions amid the evolving IPO landscape.

IPO returns eclipse index benchmarks amid investor enthusiasm for robust market debuts

In the past two years, the IPO market has experienced a notable shift in investor focus on financial sustainability and profitability of newly listed companies, reflecting a more discerning approach in an environment characterized by tight monetary conditions and market uncertainties. 

In response to this evolving investor approach, companies considering the public option are increasingly emphasizing their revenue and profitability metrics and plans for achieving sustainable growth. The net profit margin metrics of the 2023 and YTD 2024 IPO cohorts reveal noticeable improvement across most regions. In China, regulators have introduced more stringent listing requirements for IPOs in a bid to enhance the quality of companies going public and protect investor interests.

Meanwhile, the US has showcased a broader array of companies making their market debuts, ranging from nascent technology and health ventures to mature, scalable firms. This diversity has been a key factor in driving a considerable increase in the average deal value and a notable surge in the median net profit margin across the US market. 


Unicorn IPO hope stirs as markets pivot from post-pandemic crunch to rate cut optimism

Unicorns, which are typically disruptive, privately held companies that are generally less than a decade old and have reached billion-dollar valuations, revolutionize markets or entire industries.

Within IPO pipelines, technology unicorns represent approximately half of the total IPO candidates, followed by financial, industrial and consumer sectors. AI unicorns have been particularly notable for significant funding rounds, as startups specializing in AI and machine learning (ML) gear up for public offerings amid rising investor interest in the field. The AI vertical's robust growth and substantial funding highlight its vital position in the current unicorn landscape, with some of them well-positioned for ongoing success and prospective IPOs in the near future.

Geographically, almost half of unicorns in the global IPO pipeline are from the US, reflecting its dominant position in the startup universe. Mainland China follows with 15%, a sign of its growing influence and the rapid development of its tech sector. India also shows a notable presence, with 7% of unicorn IPO candidates. The high concentration of unicorns in these regions indicates robust ecosystems that support innovation, funding opportunities and favorable regulatory environments, making them prime locations for startups aiming to go public.


Global elections amplify uncertainty over the impact of specific policies on IPOs

Just as investors and IPO candidates adapt to shifting interest rate policies, they must also cope with a complex geopolitical and election environment. This year, the political calendar is marked by elections in more than 50% of the global population accounting for nearly 60% of worldwide GDP, including many geopolitically significant regions. This amount of potential change is likely to create an exceptional level of uncertainty. 

Historically, US presidential elections have had little impact on the country’s IPO activity during an election year, apart from dampening activity during the November voting months. However, in the years following elections, IPO activity has often seen a noticeable uptick, suggesting that policy changes, economic initiatives and a stabilized market sentiment can broadly contribute to a more favorable environment for IPO.


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H2 2024 IPO market outlook

The second half of 2024 will be shaped by key factors affecting the global IPO market – the varying schedule of interest rate cuts, escalating geopolitical tensions, and the election super-cycle. 

 

Global inflation continues to cool amid varying economic conditions and regional inflation levels. The central banks’ easing cycle is likely to be disjointed with some European and emerging markets leading the way, ahead of a more hawkish Federal Reserve (Fed) in the US. When central banks, including the Fed, reverse their course and start to lower interest rates, investors are expected to move their capital in search of higher returns. This shift is anticipated to increase liquidity in equity markets, emerging markets and growth-oriented sectors like technology and health and life sciences.

 

Geopolitical tensions could compel businesses to explore alternative IPO markets, avoiding high-risk regions and seeking more favorable regulatory environments. This shift could potentially lead to the rise of new financial hubs and alter the IPO market landscape. 

 

Meanwhile, election-related uncertainties impact IPO timing. Some companies could postpone offerings to sidestep the unpredictable effects of electoral outcomes on market stability and investor confidence, preferring to await more stable post-election conditions.

Guide to going public

Our guide to going public covers strategic considerations before, during and post-IPO.

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To get more insight into the steps companies need to take to maximize their chances of IPO success, download our Guide to going public (pdf).

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Summary

The global IPO market has continued to diverge, with EMEIA and the Americas surging while Asia-Pacific slows. IPO returns eclipse index benchmarks amid investor enthusiasm for robust market debuts. The financial sector leads in growth, while hopes for unicorn IPOs rise with more interest rate cuts on the horizon. Global elections amplify uncertainty, while geopolitical dynamics bring both challenges and opportunities.

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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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