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Summary
- The IPOs through the SPAC route have raised more than US$100 billion annually
- There has been a huge surge in volume as well
- However, the average ticket size has dipped by 3.3%
The initial public offerings (IPOs) through the special purpose acquisition company (SPAC) route have topped US$100 billion annual-mark for the first time.
The value of SPAC IPOs in 2021, as of date, stands at US$100.1 billion, even as the average ticket size has marginally come down, according to data available with SPAC Research.
The value of IPOs through this route is already 20% more than the entire 2020 – when SPAC IPOs stood at US$83.4 billion.
Also Read: What are SPACs and why are they picking up steam of late?
Source: SPACE Research. Kalkine Graphics
Despite the slowdown in the SPAC IPOs in the month of April, the number of offerings in four months of 2021 stood at 308, 24% more than 248 seen in entire 2020.
The SPAC IPOs have slowed down in the month of April after the US Securities and Exchange Commission (SEC) issued guidance aimed at classifying SPAC warrants as liabilities rather than equity. The guidance, if transformed in law, would force all the companies listed through the SPAC route to recalculate their earnings with a retrospective effect.
As the volume of SPAC IPOs grew at faster pace than their value, the average ticket size has marginally come down. The average ticket size of SPAC IPOs in 2021 stands at US$324.9 million – down 3.3% from US$336.1 million in full year of 2020.
Source: SPACE Research. Kalkine Graphics
As more and more companies are queueing up to get listed through the SPAC route, the compounded annual growth rate (CAGR) for the amount raised through the segment, from 2013 till now, stands an astounding 79%. The CAGR for the number of IPOs through this route, during the same period stands at 59.6%. On the other hand, the average ticket size, which has witnessed a milder growth, shows a CAGR of 11.7%.
Also Read: DeepGreen plans IPO via SPAC merger
Also Read: Walmart’s Flipkart in initial discussions for US listing through SPAC deal
SPAC is largely seen as a backdoor route for listing on exchanges, where a shell firm is listed on a stock exchange with the aim of acquiring a private company. SPAC firms aim at taking private companies public without going through the rigourous IPO route.
