Strong Q4 IPO Activity Demonstrates Resilience, Defies Expectations
Despite the uncertainty of 2020, IPO investors enjoyed a prosperous year as IPO activity proved resilient to the impact of the COVID-19 pandemic supported by low interest rates and expansionary monetary policies. Global IPO volumes continued to accelerate, increasing by 19% to 1,363, while proceeds increased 29% year-on-year to a total of US$268b. This strong IPO performance indicates global equity markets continue to provide the platform for companies with access to public capital.
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The Americas region saw the biggest year-on-year increase in both IPO volumes and proceeds, with 2020 IPO numbers increasing 30% to 282, and proceeds rising 78% to US$97.9b. Asia-Pacific also made significant gains recording a 20% increase in IPO volumes to 822 IPOs and 45% in proceeds to US$136.2b. In EMEIA, while IPO numbers rose 7% to 259 IPOs, proceeds fell 43% to US$33.9b. Overall, 2020 saw a steady increase in cross-border IPO volume, accounting for 7.9% of global IPOs and 10% by proceeds, compared with 8% and 7.1% in 2019 respectively.
The technology sector maintained its lead by both volume and proceeds finishing the year with 324 IPOs and US$89.1b respectively. By IPO number, industrials followed in second place with 243 IPOs and US$31.4b, and then health care with 235 IPOs and US $50.4b in proceeds. These and other findings were published today in the EY quarterly report, EY Global IPO Activity: Q4 2020.
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Paul Go, EY Global IPO Leader, says:
“2020 was full of surprises. Market volatility in the first half of the year was higher than any time since the global financial crisis. But volatility quickly subsided, with the year ending on the back of some stellar IPO market performances. Buoyant global IPO markets have demonstrated the resilience of equity markets despite the pandemic. Capital markets and IPOs allow high-growth companies to fund innovation, accelerate growth and make significant contributions to society.
“Looking to the first half of 2021, continued fiscal stimulus, abundance of liquidity and optimism linked to COVID-19 vaccines should sustain IPO momentum. However, investors should beware of any potential market correction, especially for those companies that have seen their share prices make substantial gains from the market rally in 2020.”
