Number of IPOs on London Stock Exchange plunges

The number of companies floating on the London Stock Exchange fell sharply in the first half of this year, with the money raised by companies plunging by 94% compared to the same period last year.

Only 26 companies have made their debut on the LSE this year, a 45% decrease from the first half of 2021, while raising only £595m.

Looking at the second quarter of 2022, the main UK market saw just six IPOs raising £192m, while there was only one AIM IPO. This is in stark contrast to the second quarter of last year, which saw 12 main market IPOs and 13 on AIM, raising a combined total of £3.8bn.

UK AIM IPOs fall to lowest levels since 2009

Global IPO activity was similarly poor, falling 46% in deal numbers to 630 and 58% to $95.4bn in proceeds compared to the first half of last year.

In the global market, energy IPOs took the top spot, raising more than any other sector at $27.9bn. Meanwhile, tech and life science IPOs saw a sharp decline, falling from 504 IPOs in the first half of 2021 to 197 this year.

China now accounts for over a quarter of all global IPOs, with Shanghai alone hosting 69 IPOs in H1, raising $32.6bn, a 46% increase from last year. Combined with Shenzen and Beijing, China accounts for 28% of global IPOs and a majority (51%) of money raised so far in 2022.

Meanwhile, the NASDAQ saw a sharp decline, seeing only 41 IPOs compared to 162 in the first half of last year, partially due to a reduction in technology IPOs.

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Scott McCubbin, EY UKI IPO leader, said: "The London IPO market has experienced a very difficult start to 2022. There is a perfect storm of geopolitical pressure creating a challenging macroeconomic landscape, which are compounded by inflationary pressures focused on high energy and commodity prices leading to associated interest rates rises. We expect a weak IPO market for the remainder of 2022 due to these challenging conditions.

"However, the pipeline of IPOs is healthy, with a number of delayed IPOs because of the turbulent market conditions in the first half of the year. This provides a more positive medium to long-term outlook, although the timing of a rebound is hard to predict given the uncertain geopolitical and macroeconomic landscape."

Debbie O'Hanlon, EY UKI private leader, added: "The global equity markets have experienced a turbulent first half of the year, with a significant decline in activity compared to the record-breaking IPO market in 2021. The previous driving forces of technology and life science stocks have seen reductions in share price, leading to a weakening in investor sentiment. These sectors have been trumped by the energy market as the leading sector for global IPOs.

"There are, however, pockets of optimism globally, notably in the Asia-Pacific region, where positive economic developments and new Government policies in China are expected to drive further activity. However, the overall IPO outlook for H2 2022 remains challenged in the short-term."