London stock market IPO proceeds fell 40% in 2023

• IPO activity on the London stock markets fell 40% by proceeds and 49% by number of listings in 2023
• Global IPOs were 33% lower than 2022 in terms of funds raised
• Sustained macroeconomic headwinds are likely to dampen UK and global IPOs in early-2024, but pent-up demand may lead to more IPOs in the second half of the year

The London stock market saw just 23 issuers listing in 2023 which is a 49% decline on the 45 recorded in 2022 and represents the quietest year on record since 2010, when EY first started collating this data. 

The 23 issuers in 2023 raised £953.7m in total, down 40% from the £1.6bn raised in 2022. The largest IPO in 2023 was CAB Payments which raised £291.5m in July 2023. 

In Q4 2023 there were no IPOs on the main market or Alternative Investment Market (AIM) as the London stock market continued to be affected by headwinds including rising inflation, interest rate rises and geopolitical tensions.   

Scott McCubbin, EY UKI IPO Leader, comments: “The challenging macroeconomic conditions which drove a slowdown in overall M&A market activity in 2023 had a knock-on effect on IPOs, with a relative pause in activity towards the end of the year. The stability of equity markets hinges on consistent conditions so whilst falling inflation and interest rate reductions may ease in the first half of 2024, the upcoming UK and US elections in the latter half might delay significant IPO activities until 2025.

“Although we may not see a rebound in IPO activity in 2024, there are reasons to be positive. The fundamentals of London as an attractive global listing destination remain strong, and pent-up demand for IPOs suggests we are likely to see an upturn in the market in the second half of the year as economic challenges continue to ease. 

“The FCA’s proposed revisions to simplify the UK listing regime – particularly the increased emphasis on disclosure to empower investor decision-making – should also provide a boost and have been broadly welcomed by the market. However, as ever it’s imperative that a careful balance is struck between reducing red tape and safeguarding investor protections.” 

Global activity continued to cool, but pockets of activity are emerging

Global IPO volumes fell 8% in 2023, with proceeds down by 33% compared with 2022. In total, 1,298 IPOs raised US$123.2b. 

Technology IPOs continued to have the highest proceeds, raising US$32.2b, however, the sector saw declines driven by subdued investor reception to high-profile tech IPOs in the US and generative artificial intelligence (GenAI) startups still being in the venture capital stage. The industrials sector had the most deals in 2023 (265) whilst the consumer sector was the only sector to increase by both IPO volume and proceeds year-on-year.

The number of IPOs in the Americas were up 15% to 153 deals compared with 2022, with several high-profile deals helping to drive three-fold proceed increases to US$22.7b. In Asia-Pacific, 732 companies raised US$69.4b, a year-on-year fall of 18% in volume and 44% in value, with Mainland China and Hong Kong continuing to decline in volume and value. The EMEIA IPO market saw a 7% rise in volume contrasted by a 39% decrease in proceeds with 413 deals raising US$31.1b in total.  

Debbie O’Hanlon, EY UKI Private Leader, said: “Whilst market conditions remain challenging, appetite for IPOs is high and smaller deals are emerging with improved after-market performance. With many governments now taking measures to boost IPO activity – particularly in high-growth economies – it’s essential that IPO candidates focus on building fundamentals and managing price expectations to be ‘IPO ready’ when the window does open in 2024.”