Evening Brief – 04.04.24
Mixed Results
The Americas and EMEIA IPO markets had a strong start in 2024, raising global proceeds. However, the Asia-Pacific area began on a negative note, decreasing overall global volume, according to new EY data.
In the first quarter of 2024, 287 global IPOs raised $23.7 billion, a 7% reduction but a 7% increase year on year. Approximately 10 private equity-backed IPOs went public.
The promise and reach of the artificial intelligence (AI) vertical are expanding in the private markets, with most AI and AI-related enterprises still in the seed or early stages of venture capital funding. This means that there may be an uptick in IPOs in the coming years as these companies grow in private markets before making their public debut.
The Americas continues to outperform in IPO activity compared to both the previous quarter and the first quarter of 2023, with 52 deals and $8.4 billion in proceeds, up 21% and 17%, respectively, year on year. Each of the top seven deals in the first quarter raised more than $500 million, compared to one in the first quarter of 2023.
Asia-Pacific IPO activity in the first quarter totaled 119 deals and $5.8 billion in proceeds, down 34% and 56% year on year, respectively. This reduction was particularly severe in Mainland China and Hong Kong, where the number of deals fell by more than half and the magnitude of the deals fell by almost two-thirds.
Both markets have seen a drop in IPO activity in recent years. So far this year, there have been just 10 IPOs in Hong Kong, with two worth more than $100 million, marking a historic low in terms of proceeds since 2010.
The EMEIA IPO market witnessed meaningful growth at the start of the year, launching 116 IPOs totaling $9.5 billion in the first quarter, up 40% and 58% year-over-year, respectively.
This rise was attributed to larger average deal sizes from IPOs in Europe and India, which enabled EMEIA to maintain first place in global IPO market share by proceeds since Q4 2023. Since 2019, India has rapidly gained prominence, particularly in the number of IPOs, and has now emerged as a standout performer.
“As 2024 unfolds, participants in the IPO market are entering uncharted territory,” said George Chan, EY Global IPO Leader. “IPO candidates are influenced by the recent pivot in investors’ preference toward proven profitability in an altered interest rate landscape and are doing this while facing the intricate dynamics of an intensified geopolitical climate and the buzz around AI.”