The number of initial public offerings (IPOs) on the UK stock market has jumped over 310 per cent in a year, with 113 companies listing in 2020/21 compared to just 36 in the previous 12 months, according to new data shared with City A.M. this morning.
The market value of the companies listing has also soared, rising over 300 per cent from £16.5bn last year to £50.9bn this year, the figures from Bowmore Asset Management showed.
Despite claims that the UK stock market is still reliant on ‘old economy’ stocks such as banks, miners and oil & gas companies, many big-name tech companies have chosen London for their stock market debuts in the past year.
These include recent blockbuster IPOs such as the £8bn listing of fintech firm Wise and £1.7bn float of cybersecurity company Darktrace.
Other high-profile tech companies which have chosen London include Trustpilot and Alphawave.
Surprisingly, there was a significant increase in IPO activity over the summer with 27 IPOs during July and August this year, typically a period when the IPO market normally is on its summer holiday.
This is the highest number of IPOs during any two-month period since 2016. The group of summer IPOs in 2021 included the £5bn float of biotech firm Oxford Nanopore.
Investors had been nervous that disruption to global supply chains had the potential to knock the IPO market off course. However, Bowmore says that while this may have temporarily led some investors to be more cautious, it hasn’t derailed companies’ enthusiasm for UK IPOs.
“The uncertainty caused by the pandemic led to a drought for the IPO market during 2020. However, London’s IPO market has genuinely boomed over the past 12 months,” commented Charles Incledon, Client Director at Bowmore Asset Management.
He told City A.M. this morning: “For stock market investors it’s great to see that so many major businesses still see public markets as the best platform to realise their full growth potential.”
“This is great news for private investors, as last year there was increasing speculation that private equity, reserved for institutional investors, was becoming the default for further investment, in turn denying retail investors the opportunities to invest in new growth companies.”
“When the UK stock market attracts major tech IPOs like we have seen in recent months, it is a win for private investors. They get to benefit from the growth of the most successful businesses and can potentially benefit from more exposure to a sector that has often been reserved for institutional investors in private equity,” Incledon concluded.