UK Posts Highest IPO Quarter Since 2007

The U.K. closed out the first quarter of 2021 with the strongest opening for initial public offerings (IPOs) in 14 years, City A.M. reported on Monday (April 12), citing research from EY.

The first three months of this year also marked the most capital raised in a single quarter in seven years. The total funds raised of £9.4 billion ($11.2 billion) were also more than half of what was raised last year. 

“With an effective vaccine rollout underway, momentum and confidence in the U.K. IPO market should continue to build, but future growth may vary, depending on the sector,” Scott McCubbin, EY partner and UK and Ireland IPO leader, said in the report. 

The alternative investment market (AIM) — a sub-market of the London Stock Exchange (LSE) — had eight IPOs raising a combined total of £441 million ($606 million). The main market had a dozen IPOs that notched a total of £5.2 billion ($7.1 billion). During the first quarter of 2020, there were only three IPOs on the main market and two on AIM. The combined total raised  £615 million ($845.3 million).

“The increase in U.K. IPO activity, which began in the latter half of 2020, is expected to continue at pace as confidence in the post-pandemic landscape builds and the U.K.’s credentials as an international leader hold fast,” Helen Pratten, EY strategy and transactions partner, said per City A.M. “There is clearly competition to IPOs from U.S. SPACs seeking acquisition targets in the U.K., which could stand to affect or reshape the market here.”

The U.K. started allowing SPACs following Brexit.

India has also posted record-high IPO activity this year, with $2 billion raised before the close of the first quarter — the most IPO capital raised in the country since 2008.

U.S. IPO activity surged in 2020, with analysts estimating that there were about 480 IPOs, up 100 percent from 2019. The number is also over 20 percent more than IPOs filed in 2000, which was the last record year for filings. By the end of February, there were already more than 250 new public listings in the U.S.; in February 2020, there were 32.