Banks lose hope of London IPO recovery this year

London, which was Europe's most popular listing venue in the boom of 2021, has attracted just 2% of all European IPO volumes since January, with Zurich and Frankfurt the busiest venues, according to Dealogic data

Banks have mostly given up hope this year will bring a long-awaited recovery in UK IPOs, as stock exchanges within the EU and Switzerland have so far proved more appealing, senior bankers told Reuters.

London, which was Europe's most popular listing venue in the boom of 2021, has attracted just 2% of all European IPO volumes since January, with Zurich and Frankfurt the busiest venues, according to Dealogic data.

Part of the reason is the sluggishness of Britain's economic recovery and a perception its stock market is undervalued.

Bankers anticipate London will recover in 2025, when more private equity-owned firms mature into IPO candidates and stock prices are anticipated to increase.

So far this year, UK initial public offerings have raised around $130 million, largely driven by Air Astana's dual listing. That is a marginal rise from this time last year but an 81% decline from the same period in 2022, Dealogic's data reveals.

We are likely to have a thin IPO market in the UK in 2024, Tom Swerling, global head of equity capital markets (ECM) at Barclays, told Reuters, adding that he saw a "reasonably healthy" pipeline of UK initial public offerings next year.

Tom Snowball, who oversees UK equity capital markets at BNP Paribas, also forecasted limited London activity this year.

What there was would "likely on the smaller end of the market," although he said the bank was talking to clients about next year.

Mainland Europe, which with the exception of Germany is experiencing stronger economic growth, has seen a series of deals in recent months after two years of little activity.

Companies, including Swiss skincare giant Galderma and French software provider Planisware surged on their market debuts.

Private equity firm CVC and Spanish beauty group Puig are in the process of launching their multi-billion euro IPOs in Amsterdam and Madrid respectively.