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Highlights
- UK maintains its position as the largest European IPO venue based on funds raised.
- London IPO activity reached record highs in Q3 with boost in both the main market and AIM.
- Tech companies have a bright future as the UK government proposes to reform the listing rules.
London has maintained its position as the most attractive IPO venue across Europe by funds raised in the third quarter and is continuing its dominance with the same momentum as in the last two quarters, touching new highs.
According to a research report from EY, the revival of activity witnessed in the last two quarters has boosted both the main market and Alternative Investment Market (AIM) of the London Stock Exchange, with £2.9 billion being raised on the main market with 14 IPOs and £1.1 billion being raised on AIM with 19 IPOs.
As compared to 2020, the total IPO proceeds generated by the companies floating on LSE jumped up from £9.3 billion in the entire 2020 to £13.4 billion in the first nine months of 2021.
With remarkable AIM market performance, London also broke its records in the past with £300 million being raised by Revolution Beauty Group upon listing. It was the largest ever admission in the third quarter of the year, with a market capitalisation of £495 million.
Source: Copyright © 2021 Kalkine Media
According to EY UK IPO leader Scott McCubbin, London IPO market is currently at its strongest and is apparently experiencing a post-Brexit-Covid kick. He added that the mapping of the future growth of companies can be done with a certain level of predictability now, which hasn’t been seen before 2008. The most important indicator to analyse the health of the IPO market is the quantity of deals and it was up in the last quarter across both the markets. McCubbin stressed that quantity of deals has more significance than market capitalisation and thus higher transaction numbers are a relief as they represent people showing more confidence in the UK market.
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In addition to the biggest-ever tech float on the main market of LSE, the financial services and healthcare sectors also contributed towards driving up the listing activity in the third quarter. London tech IPOs have a bright future as per McCubbin as the UK Government is coming forward with proposals to reform the listing rules with the aim of attracting a higher number of high-growth tech companies to get listed in the UK. Total equity capital worth £21 billion was raised in London in the year-to-date, including the total funds raised by exiting issuers during the quarter standing at £8 billion, which was more than other European markets.
Additionally, cross-border listing activity is also accelerating as the first nine months of the year saw eight international companies coming forward to get listed in London. Although the UK is leading as the largest European IPO venue based on the funds it raises, it is still behind the US and China, holding the third position globally. Meanwhile, the global equity markets have also flourished, raising US $106 billion in 547 deals worldwide.
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Let’s take a look at some of the top UK IPOs in 2021.
Wise PLC (LON: WISE)
Previously known as Transferwise, Wise PLC made its market debut in July with an £8 billion IPO, making it the biggest-ever tech float on the LSE. Its current market cap stands at £10.4 with earnings per share of 1.88. The previous close price of its shares was GBX 1,052.00 as on 5 October 2021.
Darktrace PLC (LON: DARK)
Darktrace PLC is a world leader in providing AI cyber security. Upon listing on LSE’s main market in April, its shares jumped up by around 44%, increasing its market cap by half a million to £2.2 billion. Its current market cap stands at £5.86 billion, and it is a constituent of the FTSE 250 index. The previous close price of its shares was GBX 840.50 as on 5 October 2021.
Dr. Martens PLC (LON:DOCS)
Dr. Martens PLC has been manufacturing footwear products for over 60 years. The company got listed on the main market of LSE in January and it is a constituent of the FTSE 250 index. Its current market cap stands at £3.78 billion with earnings per share of 7.48. The previous close price of its shares was GBX 378.00 as on 5 October 2021.
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Bridgepoint Group PLC (LON:BPT)
Bridgepoint Group PLC is a private equity investor which mainly focuses on acquiring middle market businesses. It got listed on the main market of the LSE in July and it is a constituent of the FTSE 250 index. Its current market cap stands at £4.10 billion, which has jumped up from its IPO market cap of £2.9 billion. The previous close price of its shares was GBX 498.50 as on 5 October 2021.
Deliveroo PLC (LON: ROO)
Deliveroo PLC is an online food delivery company. With the largest opening market cap of £7.6 billion, the value of its shares went down by 26% upon its debut in March. Its current market cap stands at £4.73 billion. The previous close price of its shares was GBX 272.50 as on 5 October 2021.
