Upward Trend In IPOs Continues

Global IPO markets were hot in 2021 and the prospects for 2022 look similarly stronger.

It was an exceptional year for initial public offerings and for some regions that debuted listings. The spurt of activity is likely to continue into the new year.

According to consultancy EY, a total of 2,388 IPOs globally raised more than $450 billion in 2021, up 64% and 67% respectively, year-on-year. Meanwhile, the fourth quarter of the year saw the most number of deals since the fourth quarter of 2007.

The biggest IPO of the year, and the largest for the US since Uber’s listing in 2019, was that of electric automaker Rivian Automotive, which raised $13.7 billion in November. Notably, offerings for special-purpose acquisition companies (SPACs) outpaced those for typical IPOs, with SPAC-based IPOs witnessing a fivefold increase compared to 2020.

Last year also had an explosion in deals in regions that have historically had few significant offerings. According to EY, the number of deals in the Middle East and North Africa more than tripled in 2021, while offering proceeds were up nearly 300%.

Two notable examples on the Abu Dhabi Securities Exchange, which hadn’t had an IPO since 2017, were the $800 million IPO for fertilizer producer Fertiglobe and the $1.1 billion IPO for Adnoc Drilling. In addition, fellow emirate Dubai announced in November that it plans to float stakes in 10 state-owned firms.

IPO activity in India was similarly vibrant, with a 156% increase in IPOs compared to 2020. Digital-payments firm Paytm raised just under $2.5 billion in the country’s largest-ever IPO. However, the shares collapsed 27% on its first day of trading and continued to underperform, casting a pall on the prospects of other Indian tech companies hoping to go public.

After years in the cold, the Russian market experienced an IPO renaissance, with issuers raising $13 billion in a dozen offerings over the past two years. Fertilizer producer EuroChem, which aims to raise more than $1 billion, looks to lead nine other Russian IPOs this year. But the looming threat of possible expanded economic sanctions due to the Kremlin’s saber-rattling regarding Ukraine may upend those dreams.