EY Hanyoung "Last Year’s Global IPOs Hit 20-Year High... Market Momentum to Continue This Year"

[Asia Economy Reporter Ji-hwan Park] Despite ongoing economic uncertainties due to the impact of COVID-19, last year’s global initial public offering (IPO) market recorded the highest level in 20 years. In particular, the domestic IPO market stood out in the Asia-Pacific region by successfully closing five mega deals worth tens of billions of dollars. It is expected that the market will continue to thrive this year, centered around the gaming industry and large conglomerate affiliates.

Global accounting and consulting firm EY Hanyoung recently published the “2021 EY Global IPO Trend Report.” According to the report, a total of 2,388 IPOs were completed worldwide in 2021, marking a 64% growth compared to the previous year. In terms of funds raised, this corresponds to $453 billion (approximately 543 trillion KRW), a 67% increase from the previous year.

Entering the fourth quarter, the IPO market slowed down compared to the trend up to the third quarter due to uncertainties such as virus variants, geopolitical conflicts, and strengthened regulations. However, it still maintained growth compared to 2020. In the fourth quarter of 2021 alone, a total of 621 IPOs were completed globally, the highest level for any fourth quarter since 2007. This represents a 16% increase compared to the same period last year. In terms of amount, it reached $112.2 billion (134 trillion KRW), a 9% increase year-on-year.

The main driving factors behind the global IPO trends in 2021 were the strong stock markets in the United States and Europe. This momentum continued until November, before uncertainties arose due to the COVID-19 Omicron variant. In the Asia-Pacific region, IPO growth slowed somewhat in the second half of the year due to tightened IPO regulations in China and Hong Kong. However, large-scale deals centered on South Korea, Japan, and some ASEAN countries contributed to growth in the fourth quarter.

The domestic IPO market recorded 86 deals in 2021, the highest annual level since 2002, ranking 7th among the world’s top 12 exchanges in terms of funds raised and 12th in terms of number of IPOs. Special cases such as SPACs (Special Purpose Acquisition Companies), REITs (Real Estate Investment Trusts), and relistings were excluded from the tally. Notably, three mega deals?Krafton ($3.8 billion), KakaoBank ($2.2 billion), and SK IE Technology ($2.0 billion)?ranked within the top 12 in the Asia-Pacific region.

South Korea’s IPO market is attracting investor attention as it is expected to continue its upward trend in 2022. Companies with an estimated valuation exceeding 10 trillion KRW on this year’s listing schedule include LG Energy Solution and Kakao Entertainment. With the Korea Exchange easing listing requirements for innovative companies, it is analyzed that the IPO fever will continue in sectors such as gaming, metaverse, platforms, and content.

Lee Taegon, EY Hanyoung IPO Leader, advised, “Despite global uncertainties, the domestic IPO market in 2022 is expected to maintain the upward momentum seen in 2021. The primary task is to convince investors of corporate value through solid growth strategies and a clear ESG vision.”

This content was produced with the assistance of AI translation services.