EV: Record year for the global IPO market in 2021, in view of challenges in 2022

Despite the uncertain environment that promised in 2021, the global public record market enjoyed a remarkable year, recording historically high numbers and revenues, especially in the fourth quarter. In total, 2,388 deals were completed in 2021, generating revenues of $ 453.3 billion, an increase of 64% and 67% respectively on an annual basis. These, and other findings, are included in the quarterly global report, 2021 EY Global IPO Trends Reportof EY.

2021 began with the release of vaccines for COVID-19, the recovery of global economies and ample market liquidity accelerated by government stimulus programs, events that led to optimism for global public records. The fourth quarter of 2021 was the most active fourth quarter in terms of number of agreements, surpassing the performance of the fourth quarter of 2007, recording a 16% increase in the number of public subscriptions (621), and a 9% increase in revenue. ($ 112.2 billion), compared to the fourth quarter of 2020.

Globally, the tech industry recorded the highest number of public registrations (611) for the sixth consecutive quarter and garnered the highest revenue ($ 147.5 billion) for the seventh consecutive quarter. In second place was the health sector with 376 public registrations, which generated revenues of $ 65.4 billion. It is followed, a short distance, by the industry, with 310 public registrations, which collected $ 63.1 billion.

A milestone year for the American continent

The American continent experienced a positive year, boosted by low interest rates, increased liquidity, bullish stock markets, an improved consumer climate and the overall optimism fueled by the release of COVID-19 vaccines in some countries.

In total, the region saw 528 public registrations raise $ 174.6 billion, up 87% and 78% respectively. Health remained the industry-leading leader in the number of transactions, with 172 public subscriptions raising $ 32.2 billion. .

Moderate gains for the Asia-Pacific region in 2021

Public registrations in the Asia-Pacific region maintained a steady pace during 2021, with the number of deals (1,136) and revenues ($ 169.3 billion) increasing by 28% and 22% respectively, on an annual basis. While these gains are impressive, they are nevertheless a modest performance compared to the historically high levels of public records recorded on the American continent and in Europe, the Middle East, India and Africa (EMEIA). In terms of sub-sectors of the business, technology recorded the highest number of deals (257) and generated the most revenue ($ 45.4 billion) during the year.

The EMEIA area public record markets showed the highest growth on an annual basis

The EMEIA area fluctuated during the year. Thanks to a positive business environment, which ensured high returns and low risk, the region’s stock markets performed exceptionally well, leading to the highest growth rate among the three geographical areas covered by the report, with a 158% increase in the number of public (724 deals) and 214% in revenue ($ 109.4 billion). The successive waves of COVID-19 in the region, however, and disruptions in supply chains, may pose risks for the first quarter of 2022.

Europe made a profit, with 485 public registrations (up 154%), raising $ 81.1 billion (up 195%). Activity in the UK also remained strong, recording a 223% increase in the number of transactions (97 public subscriptions) and an 81% increase in revenue ($ 21.2 billion).

Prospects for the first quarter of 2022: Opportunities for the use of high valuations, despite the indications for future turmoil

The new year is expected to bring opposite, but also hurricane winds, which will probably affect the activity of public registrations. A combination of geopolitical tensions, inflation risks and new waves and variants of the ongoing COVID-19 pandemic, which are hindering full economic recovery, will affect the markets. Nevertheless, relatively high valuations and market liquidity currently keep the public registration window open in 2022. Those organizations considering public registration can expect higher market volatility, so they should remain flexible, with an alternative plan to meet the financing needs, in case the registration schedule is delayed.

Commenting on the research findings, o Mr. Tassos IosifidisPartner and Head of the Department of Corporate Strategy and Transactions Advisors of EV Greece, stated: “2021 dispelled initial concerns, with global treasury activity growing significantly, reaching twenty-year highs with the help of the global economic recovery, vaccination program and government and central bank support measures.

The recent upward trend of the Athens Stock Exchange and other European capital markets may be influenced by the developments concerning the Omicron variant, the energy crisis and the various geopolitical tensions, during the first quarter of 2022. The companies that plan to enter the stock market , globally, but also in Greece, should show flexibility and quick reflexes, but, above all, be able to convince investors that they have a robust growth strategy and convincing answers to the issues of environment, society and governance (ESG) “.

The data cover the entire years 2012-2021.

Source: Dealogic, EY

Fourth quarter public registration activity

Source: EY, Dealogic

Annex: Global Public Registry Activity by Industry, January 2021 – December 2021

Source: Dealogic, EY (Some sizes may not add up to 100% due to rounding)