Europe and the wider EMEIA region, including the Middle East, India, and Africa, remained the most active market for initial public offerings during the first three quarters of 2024 in terms of both volume and value.

The latest EY Global IPO Trends report shows strong market debuts, positive monetary and inflation environment and growing investor interest combined to boost activity in what is otherwise a challenging market globally for IPOs.

Proceeds for EMEIA IPOs increased 45% to $30.3bn compared to the same period last year across 394 deal, up 36% year-on-year. However, globally, IPOs are down 11% by volume and 23% by value versus 2023.

“The continued resurgence of IPO activity in Europe and the wider EMEIA region is very positive after several challenging years. For the first three quarters of 2024, EMEIA has outpaced both Asia and the Americas by both IPO volume and value, something which would not have seemed realistic even 12 months ago," said Fergal McAleavey, EY Ireland corporate finance partner.

"This has been driven by improved market conditions, falling interest rates and inflation, strong pricing and a number of very strong candidates coming to the market, such as the listing of dermatological products company Gladerma (currently valued at €18bn), private equity and credit manager CVC Partners (currently valued at €22bn) and Polish convenience store Zabka (currently valued at €5.3bn)."

EY expects central bank policies, geopolitical developments and the impact of election outcomes to heavily influence the IPO market for the remainder of 2024 and next year.

Optimism is being fuelled by lower interest rates and easing inflation, which are likely to encourage new listings and a resurgence in sectors sensitive to borrowing costs.

The group further forecast that strong performance in the US, Europe and India would support IPO activity, that cross-border listings should continue to thrive, and to expect significant public debuts, especially those backed by private equity firms and from spin-offs and carve-outs.

Historically, IPO activity in the US increases by an average of 39% in post-election years (219 IPOs) compared to election years (149) and by 24% from other non-election years (176), so a boom in public listings can be expected in 2025.

"While globally IPO activity remains well below the highs of 2021, as we look forward to the end of 2024 and into 2025 conditions are looking more positive," said McAleavey.

"Central banks are in an interest rate reduction mode, as it appears inflation is under control. The leading stock markets such as Nasdaq, NYSE, S&P 500 and FTSE 100 are all at all-time highs.

"These factors coupled with increased consumer confidence, the major electoral cycles now completed, and a backlog of PE and VC portfolio companies should lead to a significant upswing in IPOs globally."

McAleavy added that tax relief in Ireland of up to €1m on expenses relating to an IPO should encourage more companies to consider an IPO in Ireland.

"Importantly, however, there are very significant levels of available ‘dry powder’ from the private markets (private equity, venture capital and private credit) giving strong companies multiple alternative funding options for growth.”

The study found that more than 60 AI companies have gone public annually over the past two years, with about half turning a profit. Approximately 50 AI companies are currently in IPO registration, demonstrating sustained investor interest in AI-driven innovations.

Persistently lower private equity and venture capital exit activity over recent years has created a growing backlog of portfolio companies poised for monetisation.

EY suggests that a resurgence in PE-backed mega IPOs and VC-backed unicorns is taking shape, as current valuation levels become more favourable for launching mature, high-value portfolio companies into the public market.

In the first nine months of 2024, PE and VC-backed IPOs made up six of the top 10 global IPOs, accounting for a third of the total global IPO proceeds.

In the Americas, these IPOs accounted for 52% of the total proceeds, underscoring a greater willingness among PE and VC firms to exit in the current IPO landscape.

In the year to September, 77 companies chose to list abroad, up 20% from 64 in the first nine months of last year.

Since 2023, foreign-domiciled issuers have represented approximately 52% of IPOs on US exchanges, reaching a 20-year high.

Concurrently, with a contrasting stock market performance between the US and China this year, the market value gap between the two countries has reached a record high in Q3.

Despite growth in EMEIA and the Americas, there has been a global reduction in IPOS due to a pause in Asia-Pacific, although the region contributed to an 11% quarterly increase in global IPO numbers in Q3 with increased activity in mainland China, Indonesia, Malaysia and South Korea.

Photo: Fergal McAleavey. (Pic: Supplied)