Corporation re- enters public market.
The German IPO market has made a robust comeback in 2021, with several notable listings and a promising pipeline for the rest of the year.
The largest Initial Public Offering (IPO) in the second quarter was the listing of software provider SUSE, which raised nearly 1.1 billion euros. This marked a significant milestone, making it the largest IPO in the quarter.
However, the pandemic-induced slowdown in 2020 saw many companies putting their IPO plans on hold. But the improving situation in Germany, brightening economic prospects, and soaring stock markets in the first half of 2021 have given a fresh impetus to the market.
Two companies, Online optician Mister Spex and wind and solar park operator Blue Elephant Energy, are already in the starting blocks for their IPOs, potentially launching as early as July. This could add to the 14 companies that have already listed on the Frankfurt Stock Exchange in the first six months of 2021, raising a total of 8.8 billion euros.
Carsten Stäcker, Head of Equity Advisory at PwC Germany, believes at least ten more IPOs are realistic in the course of the year. However, he also anticipates the market environment to become more challenging.
Nadja Picard, PwC Europe Capital Markets Leader at PwC Germany, shares this sentiment. She expects investors to become more cautious and selective in the course of the year. Potential challenges that could arise include rising inflation, discussions about a reduction in bond purchases by central banks, increasing margin pressure, and higher corporate taxation.
The trend of Special Purpose Acquisition Companies (SPACs) from the US continued in the second quarter, with 468 SPAC I SE and OboTech Acquisition making their debut on the Frankfurt Stock Exchange. This marks the first SPAC IPO on the Frankfurt Stock Exchange since 2010.
Notable listings include Lab chain Synlab and online fashion retailer AboutYou, each raising over 700 million euros through their IPOs.
However, the performance of stock market newcomers paints a mixed picture. While some companies have seen impressive growth, others have struggled to meet expectations.
As we move forward, it will be interesting to see how these challenges are navigated and whether the German IPO market can maintain its momentum.
The finance sector, with its significant contribution from the IPO market, is anticipated to face increasingly challenging conditions as the year progresses, according to experts. Despite this, several companies, such as Mister Spex and Blue Elephant Energy, are preparing for their IPOs in the upcoming months, looking to add to the existing list of 14 companies that have already raised a total of 8.8 billion euros through their IPOs in the first half of 2021.
