The UK’s IPO market is on the verge of opening up more widely, according to a leading broker, as bankers eye a rebound in listings for the beleaguered London Stock Exchange from the second half of this year.
Investment bank Peel Hunt, which helps big firms prepare for public listings, noted “continued acceleration” in the second edition of its “IPO Speedometer” – which gives a score for the health of the UK IPO market between 0 and 60mph.
This month, the score increased to 27mph from 24mph in April. The speedometer remains in “second gear,” which classifies the market as “selectively open.”
“What has so far been a European-led IPO recovery has started to spread to the UK,” analysts said.
“Although the number of announced or priced UK IPOs remains small, it is positive to see the activity levels gradually increasing. Broader market indicators continue to improve, and the market remains open for select issuers.”
They said they expected an increasing number of UK IPOs by the second half of 2024, with “further confidence on a broader reopening” in the first half of 2025.
Peel Hunt highlighted the recent intention to float announcements from computer firm Raspberry Pi and medicare firm Aoti. The former is reportedly seeking a £500m valuation, while the latter could reportedly achieve a valuation of £160m on AIM.
“Although these deals both have a number of specific factors to them, it is positive for the market overall to see the number of UK IPO data points start to increase,” analysts said. “How they price and trade will be important for the broader market.”
London’s stock market has been battered by a dearth of IPOs in recent years, as well as a wave of firms ditching their listings in the capital for better returns overseas. The bourse has not seen a significant IPO since Deliveroo’s disastrous listing in 2021.
The biggest potential London IPO this year could be fast fashion giant Shein, which is reportedly preparing for a roughly £50bn listing that would be one of the largest ever in the UK.
The possible listing has proven controversial, with the China-founded company fielding criticism for its environmental practices and allegations around forced labour in its supply chain.
