London listing momentum continues in - Q2 2021 IPO Eye An overview of the London Stock Exchange listings in Q2 2021
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London listing
momentum
continues in
Q2 2021
IPO Eye
An overview of the London Stock
Exchange listings in Q2 2021
Market overview
Listing momentum continues
to build Main Market AIM
Ten floats Raised: Thirteen admissions Raised:
£3.1bn £664mn
Following a stellar Q1 performance, the pace of listing activity on the London Stock
Exchange has continued into Q2 resulting in the most active H1 for listing activity
since 2014, with £9.4bn being raised by issuers.
The Main Market saw 10 IPOs which raised £3.1bn and the Alternative Investment Largest IPO: Largest IPO:
Market (AIM) saw 13 admissions in the quarter raising £664mn. The largest Main Deliveroo plc Victorian Plumbing Group plc
Market IPO was Deliveroo plc which raised £1.5bn and the largest AIM admission
was Victorian Plumbing Group plc which raised £298mn and in the process became Raised: Raised:
£1.5bn £298mn
the largest ever AIM listing.
This quarter’s performance is the third busy quarter in a row following the restart
of listing activity in Q3 2020, and is in line with levels of activity on other exchanges
across the globe. Across both markets listing activity has been driven by the
technology sector and tech-enabled businesses, together with strong performances
from companies in the health care and life sciences sectors.
Yet again the UK has maintained both its position as the leading listing location in
Europe for fund raising and, on a global basis, remains in third place behind the US
and China for funds raised via IPO. Follow-on activity has also been strong with over
£9bn raised in the quarter by existing issuers representing over 20% of follow-on
funds raised in Europe in Q2. Year to date, a total of £27bn of equity capital has
been raised demonstrating the depth of market available to issuers.
1
IPO markets — historical performance
Main Market 6,000
19
20
18
17
5,000
16
Main market — 14 14
14
10 floats raised 4,000
12 12 12
£3.1bn in Q2. 12
Funds raised £mn
11
No. of IPOs
The largest by 3,000
10
10
funds raised 9
8 8
was Deliveroo 7
8
2,000 6
plc — which 5
6
raised £1.5bn. 4 4 4
4
3 3
1,000
2 2
2
0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2016 2017 2018 2019 2020 2021
Funds raised £mn No. of IPOs
2IPO markets — historical performance
IPO 1,000 18
AIM market 900
16 16 16
16
800 14
14
AIM — 13 AIM 13
700
admissions 12
raised £664mn 600
Funds raised £mn
10
10
in Q2. The
No. of IPOs
9 9
500
largest by 8
8
7
funds raised 400 7
6
was Victorian
6
300 5
5 5
Plumbing Group 4 4
200
plc — which
3 3
2 2
raised £298mn. 100
1
2
0
0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2016 2017 2018 2019 2020 2021
Funds raised £mn No. of IPOs
3Market overview
Market performance 140.00 FTSE 100
As the UK domestic economy has gradually begun to recover from lockdown and the FTSE 250
impacts of COVID-19, there has been a gradual rise in the FTSE 250 which has hit FTSE All-Share
130.00
record highs in the quarter. FTSE AIM All-Share
The AIM market has continued to trade well, albeit has shown some volatility after 120.00
peaking in late April. However, it is still trading well ahead of the position at the start
of the year driven by its tech-heavy weighting.
110.00
The CBOE Vix index has a year-to-date average of 20.6, just slightly above its 10 year
average of 17.7 and down from the highs of 2020, demonstrating that markets are 100.00
significantly less volatile than they were 12 months ago.
Global IPO activity 90.00
Riding a wave of momentum from Q1, global IPO activity in Q2 remained strong. 80.00
Ample liquidity in the financial systems, continuing government stimulus policies,
accelerated technology adoption and pandemic-propelled new economy companies
70.00
contributed to the quarter’s strong showing. Speculative and opportunistic
transactions, and soaring equity markets also fuelled IPO activity.
60.00
Q2 IPO deal numbers and proceeds were 599 IPOs and US$112bn, respectively.
Q2 was the most active second quarter by deal numbers and proceeds in the last
20 years, and beat previous records in Q2 2007 (522 IPOs raising US$88bn). 50.00
01-08-2020
01-06-2020
01-09-2020
01-05-2020
01-04-2020
01-03-2020
01-06-2021
01-05-2021
01-04-2021
01-03-2021
01-02-2020
01-02-2020
01-07-2020
01-01-2020
01-01-2021
01-10-2020
01-12-2020
01-11-2020
Overall, there was a healthy spread of IPO activity across many markets, including
the US, Mainland China, Hong Kong, the Nordics, Europe (Frankfurt, Paris and
Amsterdam), Brazil, Toronto and India by proceeds. Australia, Japan, Norway
and Israeli exchanges were also active by deal numbers. Lower volatility has also
favoured and increased the IPO activities in Q2.
In Q2, US SPAC IPOs took a pause after record-breaking activities in Q4 2020 and
Q1 2021. European SPAC IPO activity grew slightly, with 15 IPOs completed in
Q2, versus six in Q1. This compares with six SPAC IPOs on European exchanges
completed for the whole of 2020.
4Market listings
New Issues — Main Market
Private Country of Market cap. Funds Placing Closing Closing Quarter end %
Date of Equity (PE) primary on admission raised price price (after first price at change in price
admission Company backed business Sector (£m) (£m) (p) day of trading) QTR end (p) from IPO
07-Apr-21 Deliveroo plc Yes United Kingdom Software and Computer Services 7179 1,500.0 390.0 287.0 288.4 -26%
14-Apr-21 Mast Energy Developments plc United Kingdom Electricity 23 6.0 12.5 16.3 11.0 -12%
26-Apr-21 PensionBee Group plc United Kingdom Investment Banking and Brokerage Services 365 60.0 165.0 166.2 154.0 -7%
30-Apr-21 Darktrace plc United Kingdom Software and Computer Services 1719 190.0 250.0 330.0 458.8 84%
13-May-21 Alphawave IP Group plc United Kingdom Technology Hardware and Equipment 2726 856.0 410.0 370.0 360.0 -12%
Oxford Cannabinoid Technologies Pharmaceuticals, Biotechnology and
21-May-21 United Kingdom 48 17.0 5.0 5.0 3.2 -36%
Holdings plc Marijuana Producers
27-May-21 Taylor Maritime Investments Ltd United Kingdom Industrial Transportation 254 179.0 70.0 73.0 77.0 10%
01-Jun-21 African Pioneer plc Namibia/Zambia Industrial Metals and Mining 7 2.0 3.5 3.3 3.1 -13%
02-Jun-21 Aquila Energy Efficiency Trust plc United Kingdom Closed End Investments 100 100.0 100.0 101.5 95.5 -5%
16-Jun-21 Made.com Group plc United Kingdom Retailers 775 194.0 200.0 197.0 203.5 2%
New Issues — AIM
Private Country of Market cap. Funds Placing Closing Closing Quarter end %
Date of Equity (PE) primary on admission raised price price (after first price at change in price
admission Company backed business Sector (£m) (£m) (p) day of trading) QTR end (p) from IPO
06-Apr-21 Cornerstone FS plc United Kingdom Industrial Support Services 12 2.0 61.0 61.5 42.5 -30%
22-Apr-21 musicMagpie plc United Kingdom Retailers 208 110.0 193.0 196.5 191.5 -1%
11-May-21 Glantus Holdings plc Ireland Industrial Support Services 37 14.0 102.0 100.0 91.0 -11%
24-May-21 Dianomi Ltd United Kingdom Media 82 37.0 273.0 313.5 330.0 21%
24-May-21 Kitwave Group plc United Kingdom Personal Care, Drug and Grocery Stores 105 82.0 150.0 152.0 168.8 13%
28-May-21 Belluscura plc United States Medical Equipment and Services 51 17.0 45.0 53.0 56.5 26%
28-May-21 Trellus Health plc United States Health Care Providers 65 29.0 40.0 65.0 69.0 73%
Pharmaceuticals, Biotechnology and
03-Jun-21 Arecor Therapeutics plc United Kingdom 63 20.0 226.0 242.0 237.5 5%
Marijuana Producers
04-Jun-21 Artisanal Spirits Co plc United Kingdom Beverages 78 26.0 112.0 117.5 112.0 0%
22-Jun-21 Victorian Plumbing Group plc United Kingdom Retailers 850 298.0 262.0 330.0 298.0 14%
22-Jun-21 Spectral MD Holdings Ltd United States Health Care Services 80 11.0 59.0 62.0 59.5 1%
28-Jun-21 Itim United Kingdom Software and Computer Services 48 8.0 154.0 156.5 156.0 1%
28-Jun-21 Silver Bullet Data United Kingdom Industrial Support Services 35 9.5 257.0 275.0 322.5 25%
5Looking forward — H2 2021
The London markets have delivered yet another busy quarter and we are expecting Moreover, H2 may be more challenging as the lingering impact of the pandemic
this level of activity to continue into H2 once the summer break is over. That said, continues to affect companies in many sectors (e.g., traditional retail, travel,
in the first week of H2, we have already seen the largest ever tech listing in London tourism, hospitality and real estates), thus dampening investor sentiment. Further,
take place, which was also a ‘direct listing’ where no new funds are raised. as governments begin to scale back stimulus, tighten monetary policies and use
interest rates to manage the threat of inflation, we may see an increase in volatility.
Going into H2, IPO pipelines remain full with a number of listings slated for the
second half of the year, although there might be challenges ahead for the economy This said, investor confidence will remain high for companies in sectors that have
if infections continue to rise and stimulus packages are gradually withdrawn. prospered from the lockdown, including e-commerce, food delivery, games and
cloud solutions. IPO pipelines continue to grow in many markets as evidenced
With the introduction of changes from the Hill review, we are likely to see the
by companies that have completed new rounds of pre-IPO funding with rising
emergence of UK SPACs in the second half of the year, although in the short term
valuations.
any SPAC activity in the UK will be driven by US SPACs seeking to execute deals
before they run out of time and need to return cash to their initial investors. For issuers, alongside the ever present need to be well-prepared, companies looking
to launch an IPO in H2 will need to be realistic about valuations and it is more
As ever the sector themes in the second half will be driven by technology and
important than ever to be prepared to clearly articulate their position on ESG and
technology-enabled businesses, together with life sciences who have ridden the
demonstrate that they are living it on a daily basis.
post-pandemic wave and accelerated business plans. We are also seeing more
traditional companies exploring IPO again as a capital event, although their
ability to do this will depend on the speed of the return of the economy to more
normal conditions and the resilience of their business models to further potential
“
COVID-19 waves.
Globally
As IPO markets continue their forward momentum, many companies are looking
This is the third busy quarter in a row for the
to go public amid favourable conditions. A steady pipeline of US$1bn+ IPOs is UK markets, with high levels of activity on both the
expected for the rest of the year. This includes tech unicorns, SPACs and companies
in sectors such as renewables, e-commerce and health care, which are expected to
Main Market and AIM, and there appears to be no
remain attractive for IPO investors. let-up in activity in sight for the remainder of 2021.
Given the emergence of new waves and the uneven speed at which vaccines are
rolling out around the world, the pandemic looks to be something to live with rather Scott McCubbin
than something to be eradicated. EY UKI IPO Leader
6Relevant programmes
EY Global IPO Centre of Excellence IPO Retreat
Our Global IPO Centre of Excellence is a virtual hub which 16–17 May 2022
provides access to tools and knowledge for every step Looking to float in the next 12–36 months
of the journey from finding out more about what going Our IPO Retreat helps CEOs and CFOs contemplating an IPO on one of the
public means to considering capital raising options and London markets. It gives unparalleled advice from key advisors and guest
speakers who have been through the process, and provides invaluable
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IPO knowledge, tools, thought leadership and contacts find out whether an IPO is the right growth option for your business.
from around the world in one easy-to-use source. To find out more, contact:
Aneliya Petrova, apetrova@uk.ey.com
ey.com/en_gl/ipo
Contacts
Scott McCubbin Marcus Bailey
For more information about IPO Leader IPO Business Development Leader
the IPO Eye and on any IPO- Tel: + 44 20 7951 3519 Tel: + 44 20 7951 1357
related matter, please contact: Email: smccubbin@uk.ey.com Email: mbailey2@uk.ey.com
Please visit ey.com/uk/IPO for more information on how we can help you on your IPO journey.
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