Global IPO Volumes Sank 45% in 2022 Amid Increasing Market Volatility

It’s been a dismal year for stock markets, and the number of companies filing for initial public offerings (IPOs) has dropped significantly. Following record years for public offerings in 2020 and 2021, many companies have opted to stay private amid widespread geopolitical instability and macroeconomic uncertainty. 

With only 1,333 IPOs raising $179.5bn, IPO activity sank 45% and 61% by number of deals and proceeds, respectively, from a year ago, according to the EY Global IPO Trends 2022 report published this week. 

Most special purpose acquisition companies (SPACs) listed from late 2020 must now either find a target to merge or return the IPO proceeds to investors. Managers of over 600 SPACs valued at $174bn have deal deadlines in the next 14 months, according to data by SPAC Research. 

IPOs in the Americas plumbed lows not seen since the global financial crisis in 2008-2009, hitting a 13-year low by volume and a 20-year low by value. Both the number of IPOs and proceeds also fell sharply, with 130 deals raising $9bn, down by 76% and 95%, respectively, from a year ago. 

“A record year for IPOs in 2021 gave way to increasing volatility from rising geopolitical tensions, inflation and aggressive interest rate hikes,” says Paul Go, EY Global IPO Leader. “Weakened stock markets, valuations and post-IPO performance have further deterred IPO investor sentiment.”  

Public offerings backed by financial sponsors like private equity firms also saw a sharp drop, with the number of deals falling 77% while proceeds collapsed 93%. 

The EY report concluded that IPO activity is likely to improve in the new year with more favorable conditions set in place for later into 2023, but the first quarter “will likely remain somber.”