The UK IPO Market Is Still Heating Up

By Bob Huxford

The half year statistics released by the London Stock Exchange at the end of June were widely reported in the press and clearly showed a booming IPO market, with 49 IPOs completed in the UK in the first half of 2021, compared to a total of 31 in the whole of 2020. Roughly half of these were in technology or tech-related industries such as consumer internet. Like many sectors, this boom was widely predicted to slow down in July and August owing to emerging signs of transaction fatigue amongst fund managers, combined with the typical recess during the arrival of summer and school holidays. 

A brief chat with the London Stock Exchange (LSE) confirmed that, contrary to popular expectations, the number of companies coming to market accelerated during the traditionally ‘quieter’ months. In fact, 76 companies have undergone a successful IPO in the UK year to date, suggesting 27 came to market in July and August alone.  

The party isn’t over yet either, with some sizeable IPOs expected to be listing in the UK later this year. This includes a mooted £10 billion valuation for retailer EG Group, owner of Asda and food chain Leon; and DNA analysis company Oxford Nanopore Technologies hoping to improve on the £2.5 billion valuation it achieved at its last funding round in May of this year. 

Recognisable brands such as Jaguar Land Rover and designer beer company BrewDog are also hoping to go public with a market capitalisation of £2 billion apiece. In addition, online bank Monzo, Formula One carmaker McClaren, airline Virgin Atlantic, and fitness chain PureGym are said to be seeking a UK listing before the end of the calendar year.

Encouragingly, the LSE has said that conversations with stock market advisers suggest pitches for potential IPOs continue to materialise with pipelines being built out well into 2023. If that is the case, then the IPO boom that was expected to end in the first half of 2021 may instead be the new normal.