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US IPOs in 2023 recovered moderately from 2022, but remained weak as the market was constrained by rate hikes, bank failures and geopolitical turmoil.
Some 107 IPOs launched through Dec. 18, 2023, raised $19.4 billion in proceeds, compared to 71 IPOs that raised $7.7 billion. in 2022, according to Renaissance Capital, a firm that compiles and analyzes IPOs data. The data excludes IPOs of special purpose acquisition companies, known as SPACs, and closed-end funds.
The market is still trying to stabilize after massive monetary and fiscal responses to pandemic-accelerated stock markets in 2021. The surge in stocks attracted closely held companies to publicly traded markets, generating 397 IPOs for 142,400 million dollars of capital in 2021.
Most of the activity came from small caps, but a few $1B+ deals stole the show, notably chipmaker Arm Holdings (ARM), which raised ~$4.9B; The spinoff of J&J, Kenvue (KVUE), which raised $3.8 billion, and shoe maker Birkenstock Holding (BIRK), which raised nearly $1.5 billion. Delivery app Instacart (CART), also known as Maplebear, also went public in an IPO that generated ~$660 million.
In the SPAC market, only 30 blank-check companies went public, Renaissance said.
The world panorama
Globally, there were 1,297 IPOs, generating $112 billion in proceeds, a decrease from the 1,368 IPOs that raised $148.2 billion in 2022, according to the London Stock Exchange Group (“LSEG”). As in the US market, the peak came in 2021, when the 2,223 IPOs raised $416.3 billion in proceeds.
Over the past 20 years, the average number of IPOs is 1,232 with revenues of $186 billion.
Three Chinese banks top the global rankings for IPO underwriting: Citic (OTCPK:CTPCF) (OTCPK:CTPCY), China Securities Co. Ltd. and China International Capital (OTC:CNICF), according to LSEG data.
JPMorgan Chase (JPM) ranked highest among U.S. banks, in fourth place. Goldman Sachs (GS) was sixth and Citigroup (C) was eighth.
Among the top 10 global IPO underwriters is Haitong Securities Co. Ltd. Limited. (OTCPK:HAITY) (OTCPK:HTNGF) is currently ranked no. 5, Huatai Securities Co. Ltd. Limited. (OTCPK:HUATF) reached No. 7, while Guotai Junan Securities (OTCPK:GUOSF) (OTC:GJJSY) reached No. 7. Limited. (OTCPK:CGMBF) (OTCPK:CMAKY) on the 10th.
Last year, the Renaissance IPO ETF (NYSERCA: IPO), comprised of shares of companies that recently completed an initial public offering (IPO), gained ~53%, outpacing the S&P 500's 25% gain. The Renaissance International IPO ETF (NYSERCA:IPOS), however, it languished, falling 20% in the same period.
Broader equity scope
In the broader global equity and equity-linked market, Bloomberg ranked Goldman Sachs (GS) as the top underwriter, followed by Bank of America Securities (BAC), JPMorgan (JPM), Morgan Stanley (MS) and Citigroup (C ). Citic, China Securities, China International Capital and Huatai Securities took the sixth to ninth positions, while UBS (UBS) rounded out the top 10.
Citic fell to sixth from No. 1 in 2022, and China International Capital fell to eighth from fifth as Chinese banks' deal activity slowed with new regulatory measures aimed at helping troubled markets, including approvals. slowest IPOs, Bloomberg saying.
The road ahead
While some anticipate the Federal Reserve will cut interest rates in 2024, which should help boost asset values and make U.S. markets more hospitable to new stock issuance, not everyone is ready to celebrate.
“Optimists can point to the sharp drop in yields since mid-October, but it remains to be seen whether that short-term macro trend will heat up the IPO market and deal talks on Wall Street,” said SA analyst Christine Short.
There may be several large potential IPOs on the horizon by 2024, including bakery chain Panera, sports merchandise licensing firm Fanatics (FANA), Savers Value Village, fast fashion brand Shein, social media platform Reddit , Kim Kardashian's Skims and the investment firm General Atlantic. .
