Recent signs of optimism that life might be returning to the global IPO market include Japan’s Tokyo Metro raising JPY348.6bn (US$2.3bn) in the country’s largest initial public offering in six years. Elsewhere, Hyundai Motor India became the nation’s largest IPO ever when it raised US$3.3bn last year indicative of India leading Asia’s exchanges with a number of big-ticket stock listings. Of course, the US continues to draw corporates, but the heady days of the 1990s and 2000s when stock exchanges the world over celebrated blockbuster IPOs of state-owned giants is a distant memory. From London to Hong Kong, São Paulo to Singapore, IPO markets remain worryingly quiet. It remains to be seen if 2025 will see more corporate treasurers getting IPO-ready, prepping their accounting and finance systems to support the prospectus and marketing materials needed to curry investor interest.
Reasons to be positive
India remains one of the brightest spots on the IPO landscape. The Bombay Stock Exchange saw 327 IPOs in 2024, taking the number one position globally in IPO volume with almost twice as many IPOs as the US (183) and more than two-and-a-half times as many as Europe, says George Chan, EY Global IPO Leader, EY Greater China Assurance COO and author of the recent EY Global IPO Trends. This year the picture looks similarly rosy. Bombay Stock Exchange CEO, Sundararaman Ramamurthy, recently said almost 100 companies have filled draft IPO prospectuses which could collectively raise an estimated US$11.6bn. Names include the Indian subsidiary of South Korean consumer electronics group, LG, and Walmart-majority owned Flipkart.
Delivery company Talabat’s flagship listing in the Middle East, home to a growing investor presence on the ground, could also mark the beginning of more activity in the UAE which has exchanges in both Dubai and Abu Dhabi.
And the US will remain the leading IPO destination for international listings. Like Klarna, the Swedish buy now, pay later pioneer which recently announced it had filed IPO documents in the US. Last year foreign issuers made up more than half of public listings in the US — a historic high — though they contributed only 18% of the total deal value. Deals in the US from APAC increased significantly, particularly from the Chinese mainland, Hong Kong, Singapore and Australia, “driven by regulatory controls, subdued local market conditions or the pursuit of greater capital access,” lists Chan. Meanwhile consumer, TMT and industrials IPOs increasingly favoured US exchanges, attracted by specialised investor interest and more favourable valuations, he states.
Another bright spot could come from public listings of PE- and VC-backed portfolio companies which play a critical role in shaping the IPO landscape. Chan says out of the 20 mega IPOs in 2024, 12 were PE-backed, a significant increase from the two listed last year. There were also 18 unicorn IPOs listed in 2024, half of which were launched by VC firms, up from just three in 2023.
AI companies with substantial capital demands could also offer an exciting pipeline. Chan estimates more than 600 AI and AI-related companies are now public, nearly half debuting in the past four years, many with VC backing. Today approximately 60 AI companies are in IPO registration, and more than 400 others remain in the pipeline. “Among these, around 150 are privately held AI unicorns, underscoring the sector’s immense potential,” he states.
Positively, Chan finds growing confidence amongst CEO respondents, with more contemplating transactions ahead, including IPOs, divestments or spin-offs. Amongst the three types of transactions, in the Americas, CEO respondents expressed a strong preference for IPOs and divestments or spin-offs as their top financial strategy. CEO respondents in the Asia Pacific and EMEIA regions prioritised joint ventures and strategic alliances, followed by IPOs.
Chan also believes that the transformation of the global IPO market into regional ecosystems, each shaped by unique sector specialisations and growth drivers, could help fuel market activity. The success of each sector is increasingly influenced by the economic conditions of its local market and the strategic priorities of the region. For example, the entertainment content sub-sector, including film, gaming, music and TV, is gradually gaining traction across Asian countries like ASEAN member states, South Korea and India.
While energy IPOs, particularly in mining and metals, have declined, steel IPOs – driven by India’s infrastructure demand – are growing steadily, supported by rising needs for metals like steel and zinc. The aerospace and defence sector has also seen consistent growth with IPOs increasing from ten in 2021 to 14 in 2023 and 19 in 2024 driven by the US, the Chinese mainland, Japan and South Korea. “This evolving focus reflects the strategic importance of defence industries and their growing appeal to investors worldwide,” says Chan.
In another example that speaks to regional ecosystems, energy could define upcoming listings in the US given the anticipated boom in energy exports under Trump. Witness Venture Global, one of the biggest US liquefied natural gas developers, has filed for an initial public offering in what is expected to be among the biggest floats of the year.
Headwinds
However, despite positive signs, significant barriers to more listings exist none more so than the fact more companies are choosing to stay private. Private markets have grown at double the rate of public markets over the last decade and the biggest market shift isn’t from one exchange to another, but from public to private markets. Some of the world’s most valuable companies like SpaceX, OpenAI and San Francisco-based Databricks remain private with no plans to IPO and some companies that are listed are actually going private.
“Over the past year [the UK] has seen countless firms de-list and go private because public markets aren’t the same force they used to be,” says Myles Milston, Co-Founder and CEO of Globacap, a capital markets technology firm that supports investment in private markets. “In the last decade, private markets have grown at almost double the rate of public markets while falling less in the downturns, highlighting their robust nature. Nearly every day a new institutional investor announces they are increasing their allocation to private markets due to better returns.” Milston argues that private markets now offer a far more competitive alternative to the traditional IPO route for companies looking to raise capital and access liquidity.
Moreover, founders are often put off listing by the burden of going public like quarterly earnings calls and activist shareholders. And many private companies have shown they can tap liquidity without going public. Like Databricks which recently raised capital to enable employees to cash out of their options. Elsewhere, privately held Stripe the payments processing company, also raised US$6.5bn in 2023, enabling the payments company to remain private for longer.
Of course, macro trends could fan IPO activity. The second Trump administration’s promise of deregulation and encouragement of domestic production could bolster US IPO activity beyond energy to drive listings in industrials, financial services, technology, cryptocurrency, health and life sciences. Such economic policies, combined with a robust stock market, may also make US markets more attractive to European companies considering cross-border listings.
However, proposed expansionary fiscal measures, alongside significant government restructuring, could lead to higher inflation, rising treasury yields and increased market volatility. “Under such a scenario, investors may reallocate assets from equities to fixed-income securities. Future monetary policy decisions may introduce uncertainty, raising concerns about market stability and potentially shaping investor risk sentiment,” states Chan.
Trade protectionism and retaliatory tariffs could also increase costs for import-dependent companies, squeezing profitability and deterring IPO activity. It could also pressure stock markets in trade-surplus countries, including China, Europe, Canada and other emerging regions. Stricter immigration policies may exacerbate labour shortages and drive up wage costs, placing financial pressure on businesses in labour-intensive industries. Meanwhile, deregulation may create headwinds for clean energy and EVs.
The direction of US-China relations could also prompt high-profile Chinese companies to pursue IPOs in alternative markets, such as Hong Kong or European exchanges, to mitigate geopolitical risks.
Regulation also threatens to choke off activity. Food delivery group Just Eat cited a litany of reasons for withdrawing from the London Stock Exchange in November. “It showed just how much work still needs to be done to simplify rules to help retention and lure more firms in. Management described the administrative burden, complexity and costs associated with regulatory requirements, but also low trading volumes on the London market,” said Susannah Streeter, Head of Money and Markets, Hargreaves Lansdown.
Elsewhere MiFiD II regulation, introduced to increase transparency across EU financial markets and to standardise regulatory disclosures for firms, has supressed the volume of research written about quoted small and mid-cap companies. It’s impacting their visibility in the market and liquidity, access to capital and future growth, and deterring others from also going public. Other reforms in the UK like pension fund reform has also driven investors into bonds instead of stocks.
And amidst such macroeconomic and regulatory uncertainties, the IPO window can also close quickly. It means treasury teams must act quickly to ensure they can present a compelling equity story with clear potential for value creation, concludes Chan.