Global IPO Market Overview: Trends and Insights from 2024
The global Initial Public Offering (IPO) landscape experienced a notable shift in 2024, with overall volumes declining by 10% and proceeds down by 4% year-over-year (YOY). Despite these reductions, the market demonstrated resilience, particularly in the latter half of the year, which saw a stronger performance compared to the first half. According to the EY Global IPO Trends 2024 report, the total number of IPOs reached 1,215, generating proceeds of US$121.2 billion.
India and the US: Leaders in IPO Activity
In a significant development, India emerged as the leader in IPO volume for the first time, listing nearly twice as many IPOs as the United States and two-and-a-half times more than Europe. This surge in Indian IPO activity reflects a growing confidence in its market, driven by favorable economic conditions and investor interest.
Conversely, the United States reclaimed its position as the top destination for IPO proceeds, marking a return to prominence since the peak in 2021. The US stock market’s valuation reached unprecedented levels, attracting global investors and showcasing its dynamic nature. Notably, 55% of US public listings in 2024 were foreign issuers, highlighting the market’s attractiveness to international companies.
Challenges in the Chinese Mainland
The Chinese mainland faced a stark decline in IPO activity, recording its lowest levels in a decade. This downturn can be attributed to tightened regulations that have created a more challenging environment for companies seeking to go public. The regulatory landscape has led to increased scrutiny and compliance requirements, which have deterred many potential issuers.
In contrast, Australia experienced its sharpest decline in IPO volume in over 20 years, while Malaysia achieved a remarkable 19-year record high for the number of IPOs, driven by heightened interest in its market valuation and liquidity.
The Role of Private Equity and Venture Capital
Private equity (PE) and venture capital (VC) firms played a crucial role in the IPO market in 2024, generating 46% of total global IPO proceeds. This underscores the significant impact that these firms have on shaping the IPO landscape. Among the 20 mega IPOs recorded this year, 12 were backed by PE, a substantial increase from just two in the previous year. Additionally, 18 unicorn IPOs were launched, with half initiated by VC firms, reflecting a growing trend of venture-backed companies entering the public markets.
Sector Performance and Cross-Border Listings
The technology, media, and telecommunications (TMT), industrials, and consumer sectors dominated global IPO activity, collectively accounting for approximately 60% of both the number of deals and proceeds. This trend illustrates the ongoing investor appetite for innovative and growth-oriented companies.
Cross-border listings also saw an uptick, with 113 listings in 2024 compared to 83 in 2023. The US remained the leading destination for these listings, with mid-to-large cap deals demonstrating solid after-market performance.
Regional Performance Insights
Regionally, EMEIA (Europe, the Middle East, India, and Africa) led both in volume and proceeds, with 522 deals raising US$53.2 billion. This region contributed six of the top ten largest public offerings, with three being PE-/VC-backed.
The Americas experienced a robust recovery, achieving the highest IPO activity since 2021, with 205 IPOs raising US$33.1 billion. In contrast, the Asia-Pacific region continued its downward trend, with a 35% decline in deals and a 51% drop in proceeds YOY, although the second half of the year showed improved performance.
Emerging Trends: AI and Crypto
Artificial intelligence (AI) companies continued to attract significant investor interest, with over 600 AI-related public companies, nearly half of which went public in the past four years. Approximately 60 AI companies are currently in the process of IPO registration, with more than 400 in the pipeline, indicating sustained investor enthusiasm for AI-driven innovations.
The approval of Bitcoin and Ethereum exchange-traded funds (ETFs) in the US has also bolstered the legitimacy of digital assets, paving the way for increased IPO filings from crypto-focused firms. However, the success of these IPOs will depend on navigating regulatory challenges and establishing robust compliance structures.
Looking Ahead: The 2025 Outlook
Historically, IPO activity tends to rise in the years following US presidential elections, as market sentiment stabilizes and clarity in policy direction emerges. This trend suggests a favorable environment for IPOs in 2025, with expectations of growth across various sectors, including industrials, TMT, and financials.
The global IPO market is poised for a strong performance in 2025, driven by a cautiously optimistic economic outlook, favorable monetary policies, and heightened liquidity. As the traditional IPO landscape evolves into interconnected regional ecosystems, each with its own growth drivers, the market is set to adapt to the changing dynamics of global finance.
In conclusion, while 2024 presented challenges for the global IPO market, it also highlighted the resilience and adaptability of various regions and sectors. With a strong pipeline of companies ready to capitalize on emerging opportunities, the future of the IPO market looks promising.