PwC study: the IPO outlook remains sluggish

The equity markets experienced a pullback in 2022

Following interviews with twelve capital markets participants and advisors, accompanied by a quantitative analysis, a PwC study shows that as the equity markets experienced a pullback in 2022, the IPO outlook remains sluggish.

Impact on IPO activity

For this study, PwC experts Martin Coenen, Christine van den Bos, Pepijn Holst, and Shachi Vyas examined several recurring and non-recurring events and their impact on IPO activity in the Netherlands, Germany, France, and the United Kingdom. Questions addressed include:

What really drives IPO activity in Europe, specifically in the countries mentioned?
Is the current IPO trend in these markets here to stay? If not, what type of companies are likely to go public in the coming periods?
What factors will contribute to their success and how will this impact value creation?

Fear of recession affects market

During the last two decades, equity markets in Europe have experienced bouts of significant volatility owing to factors such as the global financial crisis, the Eurozone debt crisis, Brexit, the Covid-19 pandemic, the Suez Canal obstruction, and the Russia-Ukraine war, to name but a few. Equity markets now suffer from high inflation and the fear of recession, keeping the IPO window closed. Whereas 2021, in the absence of significant volatility, recorded stellar equity market performance and the biggest IPO year globally.

Looking forward, the expectation is that equity financing remains ever so important in the mid-to long-term. A slowdown in inflation may cause the IPO activity to gradually pick up in the second half of 2023, with traditional IPO activity to resume in the course of 2024.