EY Hanyoung "Global IPOs Halved in First Half Amid Stock Market Volatility"

[Asia Economy Reporter Park So-yeon] In the first half of 2022, the global initial public offering (IPO) market size plummeted to about half compared to the same period last year.

By region, while the Americas showed the most drastic contraction, the Asia-Pacific region showed relatively better results compared to other global regions, as IPOs in the tech and energy sectors in China boosted fundraising amounts, and in Korea, the mega listing of LG Energy Solution (LG EnSol) led the market.

According to the financial investment industry on the 11th, global accounting and consulting firm EY Hanyoung published the '2022 Q2 EY Global IPO Trend Report' containing these details.

According to the report, the downward trend in the global IPO market that began in the latter half of Q1 became more pronounced in Q2. Due to a highly volatile environment caused by geopolitical conflicts, macroeconomic instability, and declining corporate valuations, companies either abandoned or postponed their listings, resulting in a significant decrease compared to the record-high IPO market size in 2021.

In Q2, the global IPO market recorded 305 deals and $40.6 billion in fundraising, shrinking by 54% and 65% respectively compared to the same period last year. For the entire first half, there were a total of 630 deals raising $95.4 billion, down 46% and 58% respectively from the previous year.

By region, the Americas experienced the sharpest contraction. In the first half, the number of IPOs was 54, down 75% year-on-year, and fundraising totaled $4.8 billion, plunging 94% compared to the same period last year. In contrast, the Asia-Pacific region recorded 367 deals, a 28% decrease, and $66 billion in fundraising, a 14% decline, maintaining a relatively healthy level during the same period.

By sector, the tech sector, a traditional powerhouse in the IPO market, recorded the highest number of deals in the first half. However, the average fundraising amount per deal sharply dropped from $290 million in the same period last year to about $140 million, reflecting an overall decline in valuations.

On the other hand, the energy sector saw the average fundraising amount per deal surge from $190 million to $680 million during the same period, becoming the most influential sector in the IPO market. In fact, among the top four global fundraising deals in the first half, three were energy companies, with LG EnSol firmly holding the number one spot.

LG EnSol, which attracted attention with its record-breaking mega listing in January this year, started by gathering orders worth trillions of won for the first time ever in a demand forecast for institutional investors, and achieved a total public offering amount of 12.75 trillion won, setting a new record for the largest fundraising amount.

Lee Tae-gon, EY Hanyoung IPO leader (partner), said, "Although the IPO market pipeline is somewhat secured with several mega deals scheduled for the second half, uncertainty will continue due to geopolitical tensions, macroeconomic volatility, and weak capital markets." He also forecasted, "The tech sector, centered on core technologies such as batteries and advanced materials, and the energy sector, whose profitability has improved due to rising oil prices, are expected to lead the IPO market going forward."

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