IPOs plunged 45% globally in 2022, but still 16% higher than 2019, EY says
DariaRen
After a banner 2021, the number of IPOs globally fell by 45% in 2022 but were still 16% higher than in pre-pandemic 2019, according to a new report by EY.
The amount of funds raised plunged more dramatically, declining 61% globally from 2021, with the North American market seeing an eye-popping 95% drop.
Only 1,333 companies filed for IPOs in 2022, compared with 2,436 the prior year. Global proceeds shrank to $179.5B from $459.9B in 2021, EY said.
The North American market saw the steepest decline this year, with the number of deals falling 76% year-over-year to 130 and funds raised nosediving 95% to a mere $9B. IPO activity in the region sank to a 13-year low by volume and a 20-year low by value, EY added.
Europe/MiddleEast/India/Africa fared better, with the number of deals sliding 53% to 358 and funds raised declining 55% to $49.9B. Europe was particularly hard hit, with proceeds plunging 78%, which EY attributed largely to the Ukrainian war and the accompanying energy crisis. The Middle East/North Africa, meanwhile, saw proceeds soar 115% over the prior year, helped by large energy deals.
The Asia-Pacific market performed the best, seeing deals drop 26% to 845 and funds decline 31% to $120.6B, respectively. Mainland China IPOs raised a record amount of cash, while the Malaysian and Indonesian IPO markets were also very active this year.
Despite the current chilliness of the IPO market, investors should expect activity to pick up in the near future, EY said.
"Recoveries from past retrenchments in IPO activity provide optimism that the current market dynamics will not be for an extended period of time," wrote EY Americas IPO Leader Rachel Gerring in the report.
"Companies focusing now on public company readiness will maximize optionality for when markets re-open," Gerring added.
Meanwhile, Wall Street's major indices were in retreat on Thursday, weighed down by the Federal Reserve's hawkish commentary and weaker-than-expected holiday sales data.