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Global IPO market continues to plummet as Q3 draws to a close


LONDON, Sept. 29, 2022 /PRNewswire/ -- Year-to-date (YTD) 2022, there have been a total of 992 IPOs raising US$146b, a 44% and 57% decrease year-over-year (YOY), respectively. This follows the trend for the year in which IPO companies and investors were faced with mounting macroeconomic challenges, market uncertainties, increasing volatility and falling global equity prices. Volatility (CBOE VIX average) increased from 19.7 in 2021 to 25.6 in YTD 2022.

EY - Building a better working world

YTD, the technology sector continued to lead by number of IPOs, although the average deal size came down from US$261m to US$123m YOY. While the energy sector overtook by proceeds with the largest increase of 176%, driven largely by three of the global top five deals in YTD 2022, the consumer products sector witnessed the biggest drop in average deal size (69%).

Q3 2022 saw the lowest SPAC IPO proceeds since Q3 2016, along with de-SPACs struggling to find the right targets. The SPAC market was continually challenged this quarter with only 17 deals, raising US$0.9b. A record number of existing SPACs are actively seeking targets, with the majority facing potential expiration in the next year. These and other findings were published today by EY.

Overall regional performance: taking a wait-and-see approach

Major economies and financial markets in the Americas and EMEIA remain under pressure as quantitative tightening kicks into a higher gear.

Americas exchanges saw the sharpest decline, recording only 116 deals raising US$7.5b YTD, a decrease of 94% in proceeds and 72% in volume YOY. In direct contrast to a record-breaking year in 2021, YTD Americas IPO activity sank to its lowest level in 20 years.

YOY, EMEIA IPO activity fell by 50% and 52% by number and proceeds, respectively. Europe dropped 76% in proceeds, but the Middle East continued to be a rare bright spot with a 209% increase in proceeds, despite a 51% decrease in the number of deals.

As the region has been less impacted by inflation and geopolitical issues, Asia-Pacific exchanges have performed relatively better, housing five of the top 10 global IPOs in YTD. YTD it has also contributed 61% and 69% of the global share of IPOs and proceeds, respectively. However, it still registered YOY declines of 25% by deal number and 22% by deal size.

Paul Go, EY Global IPO Leader, says:

"With uncertainties being the IPO market's biggest challenge, companies and investors continue to wait for a more stable and positive stock market sentiment before any sustained appetite for IPO activity re-emerges."

Q4 2022 outlook: icebreakers will pave the way

Soaring inflation and rising interest rates are adversely affecting the global equity market. Geopolitical tensions and the COVID-19 pandemic led to more market uncertainty and volatility. All these factors are bringing headwinds for risk assets as we near the end of 2022.

In the Americas, IPO pipelines are waiting for the market to reopen next year, and in EMEIA, tough market conditions continue to squeeze IPO windows. For APAC, while public filings for IPOs have not picked up, activity remains strong in the background as companies evaluate their options for 2023.

Go says: "Many companies' IPO plans were put on ice in early 2022, in anticipation of more favorable market conditions. Providing market uncertainties and volatility subside, the launch of long-awaited blockbuster IPOs together with improved after-market returns may reverse the sentiment and attract more companies to follow."

Overall, IPO candidates looking to go public will need to be well prepared when re-engaging the market as they will face much lower valuations compared with the highs of 2021.

Notes to editors

About EY

EY exists to build a better working world, helping to create long-term value for clients, people and society and build trust in the capital markets.  

Enabled by data and technology, diverse EY teams in over 150 countries provide trust through assurance and help clients grow, transform and operate.  

Working across assurance, consulting, law, strategy, tax and transactions, EY teams ask better questions to find new answers for the complex issues facing our world today. 

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information about our organization, please visit ey.com. 

This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients. 

About EY Private

As Advisors to the ambitioustm, EY Private professionals possess the experience and passion to support private businesses and their owners in unlocking the full potential of their ambitions. EY Private teams offer distinct insights born from the long EY history of working with business owners and entrepreneurs. These teams support the full spectrum of private enterprises including private capital managers and investors and the portfolio businesses they fund, business owners, family businesses, family offices and entrepreneurs. Visit ey.com/private

About EY Initial Public Offering Services

Going public is a transformative milestone in an organization's journey. As the industry-leading advisor in initial public offering (IPO) services, EY teams advise ambitious organizations around the world and helps equip them for IPO success. EY teams serve as trusted business advisors guiding companies from start to completion, strategically positioning businesses to achieve their goals over short windows of opportunity and preparing companies for their next chapter in the public eye. ey.com/ipo

About the data

The data presented here is available on ey.com/ipo/trends. Year to date 2022 (i.e., January-September) is based on completed IPOs from 1 January 2022 to 21 September and expected IPOs by the end of September 2022. Data as of close of business 21 September UK time. All data contained in this document is sourced from Dealogic, CB Insights, Crunchbase, SPAC Insider and EY analysis unless otherwise noted.  SPAC IPOs are excluded in all data included in this report, except where indicated. 

CONTACT: Lauren Mosery
EY Global Media Relations
+1 732 977 2063
lauren.mosery@ey.com

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News published on 28 september 2022 at 19:01 and distributed by: