The global IPO market had an exceptional year in 2021 despite all the uncertainties, breaking records by IPO volume and proceeds consistently into the fourth quarter, said EY recently when releasing the 2021 EY Global IPO Trends Report.
Overall, the global IPO market in 2021 saw a total of 2,388 deals raising US$453.3 billion in proceeds, a 64% and 67% respective increase YOY, EY noted.
According to the report, Q4 2021 was the most active fourth quarter by deal numbers since Q4 2007, seeing a 16% (621) and 9% (US$112.2b) increase by both total IPOs and by proceeds respectively, compared to Q4 2020.
- All global markets experienced overall increases by both IPO volume and proceeds, but Europe, the Middle East, India and Africa (EMEIA) exchanges produced the highest growth, seeing a 158% increase by number of IPOs (724) and a 214% increase by proceeds (US$109.4b).
- The Asia Pacific region experienced relatively modest growth, resulting in 1,136 IPOs (28% increase) and raising US$169.3b by proceeds (22% increase).
- The Americas remained hot as well, ending the year with 528 IPOs raising US$174.6b by proceeds, an 87% and 78% increase respectively.
- Globally, the technology sector saw the highest number of IPOs (611) for the sixth consecutive quarter (since Q3 2020) and raised the highest proceeds (US$147.5b) for the seventh consecutive quarter (since Q2 2020).
- Health care raised the next highest number of IPOs by volume and proceeds, seeing 376 IPOs raise US$65.4b by proceeds. Industrials was close behind health care, with 310 IPOs raising US$63.1b by proceeds.
Asia Pacific saw modest gains in 2021
While Asia Pacific’s gains — 1,136 IPOs raising US$169.3b by proceeds — are impressive, they are modest relative to the record-setting IPO activity that the Americas and EMEIA experienced this year, EY pointed out.
As for sectors, technology saw the highest number of deals (257) and raised the most proceeds (US$45.4b) through the year, the firm said.
Greater China experienced a slow-down following Q3 2021, partly due to Mainland China’s tightened cybersecurity review requirements for cross-border IPO-bound companies that fall into certain criteria, EY noted.
This, combined with US SEC guidelines mandating that foreign issuers in the US must comply with US SEC and Public Company Accounting Oversight Board (PCOAB) inspection rules, dampened sentiment and resulted in several Chinese mega-IPOs delaying or changing their IPO plans, EY added.
Overall Greater China saw an 11% increase in IPOs (593) and 3% increase by proceeds (US$122.8b), according to the report.
Outside of Greater China, Asia Pacific performed even better, EY said.
Japan generated the highest number of IPOs launched in a single year since 2006, with 128 IPOs raising US$6.8b by proceeds in 2021 — a 38% and 104% respective increase YOY, the report says.
Australia and New Zealand also performed well with a 159% increase in IPOs (197) and a 144% increase in proceeds, raising (US$9.2b), according to the report.
South Korea, Indonesia and Thailand IPO markets also performed well in 2021, the report adds.
“Following the blistering pace set in 2020, growth in Asia Pacific IPO markets slowed to a more modest, but still respectable levels in the latter half of 2021, said Ringo Choi, EY Asia-Pacific IPO Leader.
In Greater China, IPO candidates had to adjust to new regulations, which slowed IPO activity, Choi pointed out, adding that the rest of the region, meanwhile, saw significant increases in IPO activity.
“Looking ahead, IPO candidates will need a resilient strategy that allows them to respond quickly to changing regulations, geopolitical issues and increasing ESG expectations,” Choi advised.