Global IPO activity rebounds sharply hitting historic highs in Q3 2020

Q3 2020 bucked the traditionally slow IPO period as the markets were awash with liquidity resulting in the most active third quarter in the last 20 years by proceeds, and the second highest third quarter by deal numbers.

Globally, YTD IPO activity accelerated, resulting in a 14% increase in the total number of IPOs to 872, and an impressive 43% rise in proceeds of US$165.3b.

As for sectors, technology, industrials and health care once again topped the ranks. Technology saw 210 IPOs raise US$53.9b, industrials saw 168 IPOs raise US$23.3b and health care saw 159 IPOs raise US$33.3b.

IPO activity in the Americas saw 188 deals raise US$62.4b in proceeds, increasing 18% and 33%, respectively YTD, while Asia-Pacific saw 554 IPOs raise US$85.3b in proceeds, rising by 29% and 88%, respectively YTD. Both markets have already exceeded YTD 2019 levels.

While the EMEIA region rose quarter on quarter, IPO volumes are still down YTD by 27% (130) and proceeds by 24% (US$17.6b), respectively. Cross-border IPO activity levels have held steady by deal numbers and proceeds, accounting for 8% and 10% of global IPO activity, respectively.

Americas IPO activity picked up the pace in Q3 2020

IPO activity in the Americas gained momentum overall, seeing an 18% increase in IPOs (188) and 33% increase in proceeds (US$62.4b) YTD, exceeding 2019 YTD levels. While the health care sector dominates YTD in number of IPOs (71), the technology sector leads in proceeds, raising US$22.3b through the quarter.

The Americas have proven to be the birthplace of unicorn (privately held startup companies with a value of over US$1b) IPOs, launching 12 of 2020’s 18 IPOs in Q3 alone.

US exchanges accounted for the majority of IPOs with 82% of deals and 87% of proceeds in Q3 2020. In addition, the importance of Special Purpose Acquisition Company (SPAC) IPOs on US exchanges also rose in 2020. In other parts of the Americas, the Brazil IPO market picked up as low interest rates led investors to the stock market, with 13 IPOs through Q3 2020, compared to no IPOs during Q3 2019, putting 2020 on track to be the most active year in Brazil since 2007.

Asia-Pacific IPO landscape grows stronger, window of opportunity remains open

YTD 2020 Asia-Pacific IPO activity has surpassed YTD 2019 activity by both volume (29%) and proceeds (88%). Activity in the region accelerated in part due to COVID-19 pandemic- related government stimulus policies, for example, employment subsidies provided to airlines in the region.

In Greater China, Q3 2020 IPO activities are on track to hit historic highs with deal numbers and proceeds up 152% and 139%, respectively year-on-year. As US-China trade tensions heighten leading up to the US presidential election, some Chinese companies listed on US exchanges chose to conduct a secondary listing on the Greater China exchanges, tapping into the Chinese equities market. 

The market in Japan has also intensified compared to Q3 2019 with a 67% increase in numbers and 40% rise in proceeds.

EMEIA IPO market gains momentum to get back on track

Following a slower H1 2020, EMEIA IPO markets gained significant momentum in Q3 2020 with deal numbers increasing 34% and proceeds rising 49% compared with Q3 2019, due in part to several large IPOs in the region. The region’s big winners are those riding on the tech digitalization wave – in particular technology, industrial and health care sectors.

In Europe, markets are beginning to rally, with Q3 2020 IPO numbers up 48% and proceeds increasing 51% as compared with Q3 2019.

At the same time, the UK IPO activity increased for the region as a whole with a mega IPO (deals with proceeds greater than US$1b) demonstrating the available liquidity of the market and showcasing international investor interest for the right deal.

These and other findings were published today in the EY quarterly report, EY Global IPO Trends: Q3 2020.

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