IPO Watch: The European IPO market, following a strong first half, reported a significant decrease in activity in the third quarter of 2024. No new debuts were introduced during the summer season in Warsaw, with all focus on the IPO of Żabka.
The value of Initial Public Offerings (IPO) conducted on European exchanges in the third quarter of 2024 totalled 0.3 billion euros (a total of 8 debuts), representing a 92% decrease compared to the corresponding period of the previous year (3.6 billion euros, total of 16 debuts).
The calm third quarter on the European IPO market was primarily due to uncertainty surrounding elections and regulatory changes. Despite the quiet summer, several “mega IPOs” in Europe were announced at the end of the third quarter that will test investor appetite in the fourth quarter and into 2025. Among them was the debut of Żabka, one of the largest debuts in the Warsaw Stock Exchange’s history, which took place on 17th October, according to the latest “IPO Watch EMEA” report prepared by consulting firm PwC.
Third Quarter 2024 Summary for the Warsaw Stock Exchange (GPW)
Five companies debuted on the Warsaw Stock Exchange in the third quarter of 2024 – all debuts took place on the alternative NewConnect market. No new companies appeared on the main market during the quarter, although the planned IPO of Żabka did end nearly a year’s waiting for a debut on the main GPW floor. Żabka’s debut, which took place on 17th October, constitutes one of the largest offers in the history of the GPW – after setting the share price at its maximum level, the value of the offer was 6.45 billion PLN (1.5 billion euros, excluding the option of additional allocation).
The total value of offerings conducted on NewConnect in the third quarter of 2024 was 24.9 million PLN (5.8 million euros), representing over a three-fold increase compared to the corresponding period in 2023, when three IPOs were conducted (also all on NewConnect) totalling 7.7 million PLN (1.7 million euros). The largest debuts on NewConnect in the third quarter of 2024 were by Mentzen S.A., a corporate accounting, tax advisory, and legal services firm with an offer of 12.6 million PLN (2.9 million euros) and Lichthund S.A., a video game company with an offer worth 6.8 million PLN (1.6 million euros).
“The third quarter of 2024 on the GPW passed without much fanfare, but differed from prior ones in that talk finally began to focus on specifics, that is, on the IPO of Żabka, which the entire market was focused on. Undoubtedly, it was one of the most anticipated events of this year. The huge interest in this transaction is a positive sign indicating, among other things, that investors have capital and are willing to invest it in well-prepared and well-managed assets, regardless of the industry. It is worth emphasizing, however, that an IPO of this scale requires thorough preparation on the part of the issuer and an effort made to interest institutional investors. Therefore, we must be cautious in formulating quick conclusions and assumptions that the IPO of Żabka will automatically cause a “snowball effect” and we are in for a flood of new transactions. However, I hope that the Żabka transaction will inspire other candidates to solidly prepare for IPOs and allow them to realistically assess the possibilities of obtaining additional capital (or exit) through the GPW,” says Kamil Wardzyński, director of PwC Poland, capital markets team.
Summary of European Initial Offer Market in Q3 2024
In accordance with the latest PwC “IPO Watch EMEA” report, the European IPO market recorded a significant decrease in activity in the third quarter of 2024, contrasting with the gains recorded in the first half of the year (a 95% drop in IPO value to 0.3 billion euros compared to 6.6 billion euros in the second quarter of 2024). From July to September, 8 companies debuted on European exchanges, compared to 23 debuts in the previous quarter and 16 debuts in the corresponding period of the previous year. Elections in Europe, upcoming elections in the USA, and regulatory changes in the United Kingdome ended in the summer, all contributed to decreased activity during the summer season on the European market. However, several major IPOs commenced in September, which will test the investor appetite in the fourth quarter of 2024 and possibly influence the possibility of conducting transactions in early 2025. Among the mentioned and major IPOs that started in the third quarter, three of them are portfolio companies of private equity funds – Springer Nature (Frankfurt), Europastry (Madrid Stock Exchange – the offer was ultimately withdrawn), and the offer of Żabka from the native Polish market (which concluded with a debut on 17th October).
“The number and value of offers on European markets in the third quarter was the lowest in years, but does not indicate a complete stagnation of IPO activity. Despite regulatory changes and an election calendar, September’s announcements of major international IPOs indicate that companies and sponsors (mainly private equity funds) have not postponed their debut plans, but devoted the summer months to preparing and finalizing transactions. Successfully placed offerings and increasing company valuations (on the day of the debut and afterward) will certainly have a positive influence on stimulating the IPO market. However, due to the still incomplete election calendar for this year, a noticeable significant increase in activity and appearance of a larger number of issuers on European floors is likely to be next year rather than the end of 2024,” says Bartosz Margol, partner at PwC Poland, capital markets team.
About the IPO Watch EMEA Report
Beginning from the first quarter of 2024, the IPO Watch Europe report has been replaced by IPO Watch EMEA, which in its analysis of the IPO market, now includes regions of the Middle East and Africa, in addition to Europe. Previous editions of IPO Watch Europe are available at www.pwc.pl/ipowatch.
The IPO Watch EMEA report covers debuts on major exchanges in the EMEA region (including exchanges in the European Union, United Kingdom, Iceland, Norway, Turkey, Serbia, Switzerland, Middle East, and Africa) and is published quarterly. Transfers between markets within a single exchange are not included in statistics. The report cover from 1st July to 30th September 2024 and is based on the debut dates of shares or share rights.
The IPO Watch EMEA report includes only offers over 5 million USD, and does not include data for closed-end funds debuting on exchanges, so-called business development companies, and transactions on unregulated markets. For comparison, data for previous periods presented in the IPO Watch EMEA report have been appropriately transformed. Commentary on the Polish market discusses all debuts on the main market of the GPW in Warsaw and the unregulated NewConnect market, regardless of their value.
Source: https://ceo.com.pl/europejski-rynek-ipo-po-silnym-pierwszym-polroczu-odnotowal-istotny-spadek-aktywnosci-w-3-kw-2024-r-62742
