With regional tensions threatening to freeze IPO momentum, analysts tell EnterpriseAM the IPO pipeline remains in play. “Long-term institutional money will be availed to invest in quality assets,” Al Ahly Pharos Head of Research Hany Genena tells us.

The key issue now is timing. Issuers are likely to wait until markets allow them to “fetch the highest valuation” — a view he shares with Thndr Head of Research Amr El Alfy, who told us he expects the IPO machine to start turning again in 2H, assuming the conflict is short-lived. “I don’t expect an IPO rush [in the second half of the year], but could see at most one IPO per month,” even if near-term volatility slows the schedule, he said.

TCV is among those still preparing for a window: Tanmiya Capital Ventures’ (TCV) Managing Partner Mohamed Mahgoub confirmed that plans to list its portfolio company Copad Pharma remain on track, with a potential 4Q IPO. The company tapped EFG Hermes to quarterback the transaction, Mahgoub tells EnterpriseAM, which ultimately depends on two scenarios: markets showing a clear recovery or investors simply “getting used to the war.”

CIB as the IPO proxy

Valuations just aren’t attractive enough right now. The Commercial International Bank (CIB) — widely seen as the bellwether for Egypt’s banking sector and one of the largest recipients of foreign investment on the EGX — is currently trading at a steep reduction to its historical levels, Genena noted. The stock used to command around 8-10x earnings but is now sitting at roughly half those multiples, which he said was a key sticking point for the state’s privatization drive.

Issuers are hesitant to bring assets to market when even the benchmark name is still priced in a risk-off environment. “Hopefully, we can start to see this rerating process after Eid if military operations come to an end,” Genena said.

The reduction becomes even clearer when you look at CIB versus its GCC peers. Foreign investors tend to benchmark the stock against GCC banks because it sits in the same global indices – including the Pan Arab Index and MSCI Emerging Markets — putting it in direct competition for the same USD, Genena explained. As a result, it’s priced using the same regional yardsticks, with investors typically targeting dividend yields of 2-4%.

Who’s better placed?

Defensive sectors whose revenues are less tied to global economic cycles may be more willing to test the market. “These names include Bosta, Breadfast, and El Ezaby Pharmacy,” El Alfy said. Meanwhile, cyclical sectors such as real estate developers and non-bank financial services firms may choose to delay offerings until volatility subsides.

IPO candidates typically list at a reduction to their estimated fair value to attract investors, El Alfy said, but those reductions could widen for cyclical companies while defensive names may face smaller valuation haircuts. Ultimately, two factors will determine whether IPOs move forward: investor appetite and market liquidity.

The outlook? “A declining market does not usually take long to reverse as long as we are in a long-term uptrend,” El Alfy said, adding that he believes the IPO market will regain momentum when geopolitical volatility fades and global sentiment toward emerging markets stabilizes.

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