Europe's IPO market roars back to life, can it last?

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The European market for initial public offerings has come roaring back this year after a moribund, COVID-hit 2020, but the poor debut by Deliveroo has amplified concerns around whether the momentum can last.

FILE PHOTO: A Deliveroo delivery rider cycles in London, Britain, March 31, 2021. REUTERS/Toby Melville/File Photo

“Certainly our pipeline is the busiest we have seen in some time. Market dependent, we should have an even busier Q2 than Q1,” he said. “We’ve been in an environment where growth has been scarce, lacklustre and investors have been happy to pay up for growth wherever they can find it,” said Duncan Lamont, head of research and analytics at British asset manager Schroders.

“The market, which has seen some exaggerations in recent weeks, will normalize. Investors will get more selective and non-prime IPO candidates may have to wait a bit,” said Thorsten Pauli, head of equity capital markets in Germany, Austria and Switzerland at Bank of America.That is also true for so-called special purpose acquisition companies , he added. SPACs have no operating business of their own and raise money with the purpose of merging with an operating company to take public.

So far, there have only been 10 SPAC listings in Europe in 2020 and 2021, with a total value of about $1.3 billion - figures dwarfed by the United States where 522 such listings have brought in over $300 billion, according to Refinitiv data.

 

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