IPOs all but absent in Q2 but listed companies flock to raise capital new report shows

Financial Services | Funding | Latest News | South East
Scott McCubbin

The London markets may have felt the absence of new issuers in Q2 2020, but those already listed flocked to the market to raise capital amid the COVID-19 lockdown, according to EY’s latest market tracker IPO Eye.

In London, more than £21bn of funds were raised in Q1 and Q2 2020 combined, representing the busiest first half for follow-on fundraising in a decade – since the end of the financial crisis in 2009.

During the six months to June 2020, existing issuers dominated the market raising funds via a range of placings, rights issues and other transactions.

EY’s IPO Eye also noted that over 40% of the capital amassed in European markets in Q2 2020 was raised in London.

By a combined measure of global IPO and follow-on activity since January, London was ranked third behind the NYSE and Nasdaq together in first place, and Hong Kong in second.

Scott McCubbin, EY’s UK & Ireland IPO Leader, comments: “London has again confirmed its status as a pre-eminent equity market globally, leading the way in Europe for the most follow-on capital raised in Q2 2020 (over 40%).

“Whilst IPO activity has been almost extinguished by COVID-19, in what is historically the busiest quarter of the year, the markets were focussed on supporting fundraising by existing issuers to shore-up finances to mitigate the impact of the pandemic.”

The Main Market saw just one IPO take place – Blackfinch Spring VCT PLC – which raised some £3m in Q2 2020.

The Shanghai listed China Pacific Insurance Group also successfully raised £1.44bn by listing GDRs (Global Depositary Receipt) in London – the second listing under the London Shanghai Stock Connect programme.

In Q2 2020 AIM didn’t register any IPO activity, but did celebrate its 25th anniversary. Since, launching in 1995 with ten companies valued at £82m, over 3,800 companies have been admitted to AIM during its lifespan raising over £115bn. Q3 2020 opened with the AIM admission of Elixirr International PLC last week.

Globally, the technology, healthcare, and industrials sectors remained the most prolific producers of IPOs in the first half of 2020, together accounting for 246 IPOs (59% of global IPO activity by deal numbers) and raising US$42.7bn altogether (61% of global proceeds).

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