IPO activity in London is breaking new records as it has already surpassed all of 2020

London maintained its dominance as the most attractive European IPO location thanks to the funds raised in the third quarter, continued the transaction dynamics of the two previous quarters and reached new record highs.

Both the Main Market and Alternative Investment Market (AIM) have built on the revival of activity over the past two quarters, with 14 IPOs in the Main Market at £ 2.9bn and 19 IPOs at £ 1.1bn, according to new research AIM brought in by EY.

Funds raised by companies listed on the London Stock Exchange in the first nine months of the year totaled $ 13.4 billion.

London IPO market “never so strong”

London also broke records with historic AIM market performance, aided by the largest ever listing in the third quarter of the year when Revolution Beauty Group raised £ 300m on the stock market with a market cap of £ 495m.

Scott McCubbin, EY UK IPO Leader, told City AM that the London IPO market has “never been this strong” and has seen a “post-Brexit Covid kick”.

“The time is now,” said McCubbin. “We have a level of security and predictability when we map the future growth of a company that I haven’t seen since 2008.”

Deal amount exceeds market capitalization

The number of deals in both markets had increased compared to the last quarter – the key indicator in analyzing the health of the IPO market, McCubbin said.

“Market capitalization is less important than the volume of deals and we should calm down with the fact that the number of deals is now higher, which means that a lot of people trust the UK market.”

Quoting activity in the third quarter was driven by the financial services and health care sectors, while the main market also saw its largest technology float to date.

Wise, formerly known as Transferwise, made its market debut in July with a $ 8 billion blockbuster IPO.

London’s third quarter built on the momentum of the previous two quarters, which saw technology highs – and a notable low.

Cambridge-based cybersecurity firm Darktrace rose as much as 44 percent when listed on the main London market in April, adding half a million to its market cap to £ 2.2 billion.

But things didn’t go that smoothly for Deliveroo, whose shares plummeted 26 percent on its debut and hit nearly $ 2 billion.

The future is bright for London tech IPOs

As the government pushes proposals to reform listing rules to attract more high-growth tech companies to listing in the UK, McCubbin believes “the future for technology in London is bright”.

“The wheels are in motion and the government’s will is there. We are seeing an eagerness to move the process forward quickly, ”he said.

Total funds raised by exiting issuers during the quarter were £ 8 billion higher than other European markets, bringing total equity raised in London to over £ 21 billion year-to-date.

Cross-border listing activity also continued as eight international companies sought listing in London in the first nine months of the year.

While the UK has maintained its position as the leading European IPO location by fundraising, it ranks third in the world behind the US and China.

Equity markets also flourished around the world, when € 106 billion

No ESG story, no IPO

And looking ahead, McCubbin was confident that the London IPO market would stay on the same path and that investors ‘eyes would be fixed on companies’ ESG credentials ahead of COP26.

“Companies looking to go public must have an ESG history. Put simply, ESG is what drives growth and companies that have a sustainable agenda now will be winners in the future, ”he said.