According to Bloomberg, the value of global initial public offerings (IPOs) amounted to $26.7 billion in early 2022, down by 60% compared to the same period in 2021.
Analysts estimate that the number of deferred transactions has been growing this year amid volatile stock markets. Currency strategists at BNP Paribas believe that current conditions are not favorable for new listings. Many investors are revising their portfolios to avoid losses. Moreover, experts have been recording a decline in the number of IPOs compared with last year.
In New York, nine major companies, including cloud-based human resources platform Justworks Inc. and Four Springs Capital Trust, called off IPO due to headwinds in the strong market instability. Falling investor demand and significant market volatility have caused a rise in the value of scrapped IPOs around the world, hitting $6.2 billion. For example, South Korea's Hyundai Engineering Co. pulled its $1 billion listing and the proceeds of several Hong Kong companies dropped by 40%.
Fund managers recorded capital outflows. “They’re more focused on repositioning their portfolio rather than buying new issues”, Berenberg's head of equity syndicate Fabian De Smet said. The expert believes IPOs have currently moved from the top to the bottom of their priority list.
Many large firms generated profits despite unfavorable conditions for initial public offerings. South Korea's LG Energy Solution raised $10.7 billion in the country’s biggest-ever IPO. State-owned insurer Life Insurance Corp. of India is also gearing up for a record listing. Bloomberg News reported that the company was expected to raise about $203 billion during its IPO.
