2021: a record year for IPOs!

Global exchanges have welcomed more than 2,682 new companies in the past year. These IPOs collectively raised nearly $ 600 billion in funds, a record high. The year 2021 is also marked by the importance assumed by SPAC, listed companies in order to raise funds that allow them to acquire an existing company.

Over $ 600 billion raised through IPOs in 2021

According to PricewaterhouseCoopers’ Global IPO Watch study, there have been, on a global scale, 2,682 IPOs in the course of 2021. The number of IPOs thus increased by almost 90% compared to 2020. The amounts raised also rose strongly: 608 billion dollars, against the “only” 330 in 2020. In terms of IPOs, as well as of performance, 2021 therefore constitutes a extraordinary year for the financial markets.

More than half of the amounts raised in 2021 were in the Americas ($ 346 billion, or 57%), where publicly traded acquisitions companies (SPACs) played an important role. Followed by Asia (162 billion dollars, 27%) and Europe, the Middle East and Africa (99 billion dollars, 16%). US and Chinese exchanges alone raised two-thirds of the amounts generated by global IPOs in 2021.

Which sectors funded the scholarships in 2021?

This is demonstrated by an analysis of the sectoral distribution of IPOs the importance assumed in the last year by the SPACs. These companies alone raised nearly $ 172 billion, or 28% of the total amount raised during the 2021 IPOs, allowing them to acquire an existing company and therefore not have their own business.

Why do companies go public?

There are many reasons why a company goes public. Access to a financial market allows, in the first place, the company to diversify its sources of financing and to raise new capital. Furthermore, it leads to an increase in the liquidity of the securities (eg bonds) already issued. The initial public offering also expands the shareholder base and offers shareholders and founders for the first time the option to withdraw. Furthermore, it is often with the prospect of going public that private equity funds support companies in their early stages.

Behind the SPACs, the companies that raised the highest amounts during their IPO operate in the technological sectors ($ 92 billion, or 15%), consumer goods ($ 89 billion, 15%) and industry ($ 67 billion, 11%).

Sectoral breakdown of the amounts collected during the IPOs

Was it profitable to invest in IPOs?

Investing in companies when they become publicly traded has generally not proved profitable. According to PwC’s calculations, nearly 57% of publicly traded companies in 2021 underperformed the market, as measured by the MSCI World Index. In the United States, the figure is even more pronounced: only 2% of IPOs outperformed the market. So while an IPO is more often than not synonymous with growth prospects for the company concerned, it’s not necessarily a good deal for investors, at least in the short term.

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