The US IPO market began to recover in 2023, but the global market continued to fall (NYSEARCA:IPO)

Brilliant buddy

U.S. IPOs in 2023 rebounded slightly from 2022 but remained subdued as the market was constrained by interest rate hikes, bank failures and geopolitical turmoil.

Some 107 IPOs completed through December 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 collects and analyzes IPOs Data. Excluded from the data are IPOs by special acquisition companies, so-called SPACs, and closed-end funds.

The market is still trying to stabilize after massive monetary and fiscal responses to the pandemic sent stock markets into turmoil in 2021. Rising stocks lured tightly controlled companies to publicly traded markets, leading to 397 initial public offerings in 2021 raising $142.4 billion.

Most of the activity came from small-cap companies, but some deals worth more than $1 billion were in the spotlight, notably chipmaker Arm Holdings (ARM), which raised about $4.9 billion; J&J spinoff Kenvue (KVUE) raised $3.8 billion, and shoe maker Birkenstock Holding (BIRK) raised nearly $1.5 billion. Delivery app Instacart (CART), also known as Maplebear, also went public in an initial public offering that raised about $660 million.

In the SPAC market, only 30 blank-check companies went public, Renaissance said.

The global picture

According to the London Stock Exchange Group (“LSEG”), there were 1,297 initial public offerings worldwide that raised $112 billion, down from 1,368 initial public offerings that raised $148.2 billion in 2022. As in the US market, the peak was in 2021, when the 2,223 IPOs raised $416.3 billion.

Over the past 20 years, there have been an average of 1,232 IPOs raising $186 billion.

According to LSEG data, three Chinese banks top the global rankings for underwriting IPOs – Citic (OTCPK:CTPCF) (OTCPK:CTPCY), China Securities Co. Ltd. and China International Capital (OTC:CNICF).

JPMorgan Chase (JPM) ranked No. 4, the highest among U.S. banks. Goldman Sachs (GS) came in sixth place and Citigroup (C) came in eighth place.

Haitong Securities Co. Ltd. is one of the top 10 global IPO underwriters. GmbH. (OTCPK:HAITY) (OTCPK:HTNGF) is currently ranked No. 5, Huatai Securities Co. Ltd. GmbH. (OTCPK:HUATF) reached No. 7, while Guotai Junan Securities (OTCPK:GUOSF) (OTC:GJJSY) reached No. 7. GmbH. (OTCPK:CGMBF) (OTCPK:CMAKY) on the 10th

Last year, the Renaissance IPO ETF (NYSEARCA: IPO), made up of stocks of companies that have recently completed an initial public offering, rose about 53%, outpacing the S&P 500's 25% rise. The Renaissance International IPO ETF (NYSEARCA:IPOS), however, stagnated and fell by 20% over the same period.

Wider 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 ranked sixth through ninth, while UBS (UBS) rounded out the top 10.

Citic fell from No. 1 in 2022 to sixth and China International Capital slipped from fifth to eighth as Chinese banks' deal activity slowed due to new regulatory measures intended to help struggling markets, including slower IPO approvals said Bloomberg.

Along the road

While some expect the Federal Reserve to cut interest rates in 2024, which should help boost asset values ​​and make U.S. markets more receptive to issuing new stocks, not everyone is ready to celebrate.

“Optimists can point to the sharp decline in yields since mid-October, but it remains to be seen whether this short-term macroeconomic trend will boost the IPO market and deal-making on Wall Street,” said SA analyst Christine Short.

There may be several potential large IPOs lined up for 2024, including bakery chain Panera, sports merch licensing company Fanatics (FANA), Savers Value Village, fast fashion name Shein, social media platform Reddit, Kim Kardashian's Skims and the investment firm General Atlantic.