After a subdued 2023, the global IPO market may finally be turning a corner. Finance Magnates spoke with George Chan, Global IPO Leader at EY, to explore what’s next for companies eyeing the public markets in 2024 and how shifting macroeconomic conditions could reignite investor appetite.
2023: A Year of Missed Expectations
Despite favorable conditions in some financial markets—such as low volatility and equity rallies—IPO activity remained sluggish through most of 2023. Aggressive interest rate hikes and persistent inflation across major economies, particularly the US and Europe, dampened enthusiasm for new listings. At the same time, rising geopolitical tensions and ongoing conflicts weighed heavily on market sentiment.
“In both the Americas and Europe, inflation and tightening monetary policies eroded IPO appetite,” explained Chan. “Add geopolitical unrest to the mix, and risk tolerance took a significant hit.”
Several large IPOs that launched in late 2023 failed to impress, revealing a gap between what companies expected in terms of valuations and what investors were willing to pay. As a result, some issuers opted to delay or rethink their public debut strategies.
Regional Trends and Mixed Performance
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United States & Americas: IPO volumes rose 15% year-over-year, with proceeds more than doubling to $22.7 billion—thanks in part to several large listings exceeding $500 million. Still, the market remains 36% below its five-year average by deal count and 66% down in terms of proceeds.
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Asia-Pacific: IPO activity in the region declined, with volumes down 18% and proceeds falling 44%. China and Hong Kong remained weak, though ASEAN nations like Indonesia, Thailand, and Malaysia showed modest growth. Japan stood out for its policy-driven rebound and investor enthusiasm.
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EMEIA (Europe, Middle East, India & Africa): Deal volume grew 7%, while proceeds fell 39%, reflecting fewer large IPOs. Still, Chan noted that some regional markets posted solid returns, and delayed deals may resurface in the coming months.
What’s Ahead in 2024?
There’s growing optimism that the IPO market could recover in 2024, especially if inflation continues to ease and interest rates come down. That said, geopolitical risks and regional instability remain key variables.
“A combination of moderate inflation, possible rate cuts, and a stabilizing global economy could help lift IPO activity this year,” Chan noted. “But confidence will remain fragile if geopolitical tensions persist.”
In Asia-Pacific, a pickup in listings is expected in the second half of 2024, while EMEIA markets are cautiously optimistic about the first half.
Strategy and Readiness Are Key
For companies considering going public, strong financial fundamentals and realistic pricing will be essential. EY advises firms to focus on building compelling equity stories, managing working capital effectively, and mapping out a clear path to profitability to instill post-listing confidence.
“Companies need to prepare not just for a listing, but for life after IPO,” Chan emphasized. “That means understanding investor expectations, regulatory pressures, and competitive positioning.”
EY also encourages exploring multi-track approaches, combining IPO plans with alternative financing methods such as private equity, debt issuance, or trade sales. Dual or secondary listings may offer added flexibility in volatile markets.
IPOs in 2024: Still a Viable Option?
Despite headwinds, going public remains a powerful tool for capital raising and brand expansion. However, the conditions seen during the 2021 IPO boom are unlikely to return soon. In today’s environment, agility and preparation are more critical than ever.
Governments and regulators are also stepping in to support capital markets, which could serve as a tailwind. But for success, companies must look beyond timing and ensure they’re telling a story that resonates with investors in a changed and cautious landscape.