Industrials took the lead in number of IPOs with 115 (21%) listings, primarily fueled by strong activity in India. Meanwhile, the technology sector outperformed in terms of capital raised, amassing an impressive US$10.8b (21%) in IPO proceeds, with the US securing more than half (52%) of these funds.

There was a leap in large private equity (PE)- and venture capital (VC)-backed IPOs, with the proportion of IPO proceeds from such offerings rising from just 9% in the first half of 2023 to 41% in H1 2024. This trend was particularly pronounced in the Americas, where 74% of the IPO proceeds were from PE- and VC-backed companies.

Americas and EMEIA gain ground while Asia-Pacific activity continues to slow

During H1 2024, there was a strong appetite for equity offerings in both the Americas and EMEIA regions, buoyed by favorable stock market performance, improving IPO valuation levels and growing investor enthusiasm for new offerings. In the Americas, there were 86 IPOs with proceeds of US$17.8b, an increase of 12% and 67% respectively YOY.

The EMEIA region made a remarkable comeback in H1 2024, achieving its highest global share by number since the 2008 global financial crisis while accounting for 45% of total deal volume and 46% of value. This impressive performance was spurred by major European listings, indicating that larger companies perceive the current market condition as an optimal IPO window. India also experienced a significant surge, accounting for 27% (152) of global IPOs by deal volume, up from 13% (81) in the same period last year.

The Asia-Pacific region, once a hotbed for IPOs, has seen its market sentiment dampened by a confluence of headwinds, including geopolitical tensions, elections, economic slowdown, heightened interest rates and a drought in market liquidity, which led to investor caution. The region witnessed a prolonged slowdown in H1 2024, with a mere 216 IPOs listed and US$10.4b raised. This lackluster performance represents a staggering decline of 43% and 73% by volume and value YOY, respectively. It is important to appreciate, however, that policymakers in China have set higher requirements on IPOs to improve the strength and the scale of companies choosing to go public.

George Chan, EY Global IPO Leader, says: “The global IPO market reflects the broader economic backdrop, while seeking new balance amid geopolitical and election complexities. As the pendulum of opportunity swings toward the developed Western economies, the Asia-Pacific region faces headwinds that test its tenacity. Companies contemplating IPOs need to show heightened adaptability to make well-informed strategic decisions amid the evolving IPO landscape.”

Mirroring Asia-Pacific, Asean saw a drop in deal volume and proceeds. In H1 2024, there was a total of 66 deals (down 23% YOY) that raised US$1.4b (down 60% YOY). This was a sharp decrease from 86 deals raising US$3.4b over the same period in 2023.

Asean markets that were the most active in H1 2024 were Indonesia (25 IPOs raising US$252m), Malaysia (20 IPOs raising US$475m) and Thailand (17 IPOs raising US$433m). Singapore and the Philippines hosted one and two IPOs on their exchanges, raising US$19.5m and US$188m respectively.

Chan Yew Kiang, EY Asean IPO Leader says: “Asean’s IPO market experienced a drop in new listings in H1 2024, which is likely due to the potential shifts on the horizon due to governmental and infrastructural changes. However, as geopolitical tensions between the US and China continue to intensify, Asean as a region is strategically positioned to benefit from businesses seeking to reduce associated risks. From cross-border listings within the region to a shift in supply chains and an increase in foreign direct investments, Asean’s relatively stable political and economic landscape presents a compelling alternative for companies navigating the uncertain global climate. Further, the first half of the year is often quieter in terms of IPO activity. That said, IPO aspirants should be aware of uncertainties over the listing process, and processing times during the approval of the prospectus and the registration of securities, which can impact the attractiveness of a listing.”

H2 2024 IPO market outlook

According to the report, the second half of 2024 will be shaped by key factors affecting the global IPO market – the central banks’ interest rate cut schedules, escalating geopolitical tensions and the election super-cycle.

The report predicts that global inflation will continue to cool amid varying economic conditions and regional inflation levels. The central bank’s easing cycle is likely to be disjointed with some European and emerging markets leading the way, ahead of a more hawkish US Federal Reserve (Fed). When central banks, including the Fed, reverse their course and start to lower interest rates, investors are expected to move their capital in search of higher returns. This shift is anticipated to increase liquidity in equity markets, emerging markets and growth-oriented sectors like technology and health and life sciences.

George Chan says: “Geopolitical tensions could compel businesses to explore alternative IPO markets, avoiding high-risk regions and seeking more favorable regulatory environments. This shift could potentially lead to the rise of new financial hubs and alter the IPO market landscape. Meanwhile, election-related uncertainties impact IPO timing. Some companies could postpone offerings to sidestep the unpredictable effects of electoral outcomes on market stability and investor confidence, preferring to await more stable post-election conditions.”