Decorative pattern


January 2023

IPO blog


Compared with the boom year of 2021, IPO activity in 2022 was very disappointing. In the UK, the number of new listings fell by 93% from 123 to 40 on the Main and AIM markets, with proceeds dropping from £14.3 billion to £1.0 billion. This downturn was reflected in global markets: year on year IPO activity dipped by 45% in the number of deals and by 61% in proceeds, with far fewer large IPOs being launched.

There were several reasons for this decline in IPO activity. Chief among them were increased global geopolitical volatility, amplified by a combination of lower share prices, uncertain market conditions, rising inflation and interest rates, concerns about recession, reduced consumer confidence, and the poor post-IPO performance of many companies listed since 2021. These factors subdued investors’ confidence for investing in companies without a listed track record and caused many to look to less risky asset classes.


2023: cautious optimism

Many of the factors that stymied IPO market growth in 2022 are likely to persist into the foreseeable future. However, there is cautious optimism that 2023 will be a better year. A recent KPMG survey found that 16% of UK Equity Capital Markets (ECM) leaders expect an upturn in IPO activity in Q1 and 72% anticipate an upturn in the second half of 2023.

This optimism is based on the belief that conditions will become more favourable for IPO activity, with an improvement in many of the market and wider economic factors that caused the downturn in 2022. Investors can also take heart at the way the market rebounded quickly after COVID impacted the IPO market in the first half of 2020. There is also a healthy pipeline of UK IPOs that were planning a market listing in 2022 before market conditions soured. These are waiting to return once conditions stabilise.

In reality, many prospective IPO companies will wait for the right market window to reopen. Some of them are in no particular rush because of the generous investment they received in previous funding rounds. And there is still some way to go before investor appetite for new issues is fully restored. Investor confidence will largely depend on a return of fund flows into UK equities with the probability that investors will require greater evidence of robust operational performance from prospective listing candidates over a significant period of time. Experts predict that investors will pay more attention to a company’s revenue growth, profitability, and cash flows rather than the narrow focus on growth projections.

Increasingly investors will focus on companies environmental, social and governance (ESG) strategies and how these are communicated. A positive, clearly articulated ESG strategy correlates strongly with post-IPO performance.


Using the time wisely

With the market yet to return to stable conditions and investors generally still risk averse, it gives more time for companies in the IPO pipeline, and others that have not yet entered the pipeline but are planning one day to launch, to prepare for IPO. Preparation is crucial in order to be ready to act once market conditions are favourable. An IPO is a complex, time-consuming process and one of the largest milestones on the funding continuum. Companies generally take six months to be ready for their IPO, which supports the survey findings that IPO activity will have greater momentum in the second half of 2023.

Companies need to carefully select the advisers that will help them with the process and give serious consideration to the image the company projects to potential investors. This not only helps with the IPO itself but thinking carefully about how to be a public company is likely to improve post-IPO performance.

Companies should also consider the range of documents they need to prepare. Documents are inspected by potential investors and regulatory authorities, and therefore must be accurate, relevant, and up to date. Some documents are so important they need to be professionally produced. This is because of their size and complexity: with several advisers contributing to them, the review, updating, version control, and approval process is arduous and time-consuming. They are also subject to strict, legal deadlines which must be adhered to.

Two critical documents in particular require the expertise of professional production: the admission document, which is the regulatory document used for the IPO; and the prospectus, which is made available for all potential investors. The prospectus is a key information document that investors scrutinise before deciding whether to invest. It therefore needs to be accurate and reflect the professionalism of the company in its presentation.

Selecting a company to produce these key documents is an important decision. Perivan has a huge amount of experience and expertise in producing critical market launch documentation. Over the last five years Perivan has managed and produced more Main Market and AIM listing documents than any other company with a 29.8% market share. In 2021 Perivan produced 61% of all AIM admission documentation published and 42% of all IPO admission documentation published. These include Victoria Plumbing, the biggest ever AIM IPO, and Devolver Digital, the largest US based company to join the London Stock exchange across all markets.


If you would like to know more about Perivan’s market-leading IPO prospectus, annual report and investor & shareholder communications capabilities, please get in touch with our team.








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Decorative pattern