Brazil IPOs Have Stalled Since September

Rising interest rates, a stalling economy and floundering equity markets have led to dozens of Brazilian companies pulling the plug on their plans to go public, with no initial public offerings (IPOs) launched in the country since early September, Bloomberg reported Tuesday (Dec. 7).

Through the first eight months of the year, 48 Brazil-based companies raised a record 65 billion reais (about $11.5 billion), according to the report, which noted the last three months could be setting Brazil up for a lengthy absence of IPOs across the nation, in part because of political tension ahead of a presidential election.

“A significant decline is expected given that Brazil will face an election year and growing volatility,” Roderick Greenlees, head of investment banking at Itau BBA, the top underwriter for Brazil IPOs, told Bloomberg.

IPOs around the world have raised more than $600 billion this year, but the past several months have seen fewer companies reach the finish line and go public, with inflation and the omicron variant of COVID-19 among the primary culprits that are scaring investors from taking the plunge, the report stated.

“The scenario already looks more challenging,” Eduardo Miras, head of investment banking at Citigroup in Brazil, told Bloomberg.

The drop in Brazilian IPOs coincides with a decline in the overall stock market, according to the report.

Late last month, Nu Holdings, the parent of Brazil-based Nubank, decreased the size of its planned IPO by 20% in total implied value of the yet-to-be-listed neobank. The company’s valuation dropped from about $55 billion in August to $40 billion today.

Read more: Nubank’s Downsized IPO Sparks Questions About Neobanks, IPOs, Warren Buffett and More

Nu Holdings’ listing update comes two weeks after German-giant N26 announced that it was pulling out of the U.S. after just 18 months.

Nubank has continued seeking investors despite continued economic turmoil on Wall Street over the omicron variant, rising interest rates, rising oil prices and more.