London’s IPO drought deepens as Frankfurt, Zürich pull ahead

London’s IPO pipeline is running dry, with just GBP 8.8 bn raised in IPOs and follow-ons in 1H 2025 — the weakest inflation-adjusted tally in three decades, the Financial Times reports. Only three IPOs have landed on the main market this year, pulling in just USD 208 mn, compared to USD 16.7 bn raised by this point in 2021, Reuters reports.

REMEMBER- Despite post-Brexit reforms, years of equity outflows since 2016 have left London trailing rivals. The UK ranked just 20th globally for IPO proceeds in 2024, far behind the UAE (5th), Saudi Arabia (7th), and Oman (14th). The Middle East alone accounted for over half of global IPO volumes, while London raised only USD 1 bn, down 9% y-o-y. The city also lost 45 firms to delistings and takeovers.

IPO action is also shifting to continental Europe. Frankfurt and Zürich are preparing for a September wave, with expected listings from Germany’s Stada, Ottobock, Deutsche Börse’s ISS Stoxx unit, and Switzerland’s Swiss Marketplace Group. “These listing locations have the potential to become trailblazers for Europe,” Markus Meier, Bank of America’s head of equity capital markets in Germany, told Reuters.

Bankers pivot: With IPO mandates scarce, city firms are leaning on other business lines. Panmure Liberum now generates more than half of its revenue from advisory work, up from just a quarter in 2021. Peel Hunt has also seen research revenues rise as investment banking fees fell.

Others are arranging so-called “private IPOs” for private equity clients. These are structured secondary placements that mimic floats but never reach the open market. Secondary sell-downs in London reached GBP 14.6 bn last year — more than double 2023 levels.

The verdict is mixed: While stopgap transactions keep bankers busy, they tend to be shorter, lower-fee mandates that rarely match the scale of a full IPO — both a blessing and a drawback. “IPOs are a lot of work and have a lot more banks and big syndicates [to split fees between]… but if you do a big equity placing it’s actually less work and pretty profitable for the time you put in,” one senior banker told the FT. IPOs are also valued for the longer-term client relationships they help secure.

MARKETS THIS MORNING-

Asian markets are mixed this morning, with Japan’s Nikkei leading losses with a 0.4% dip, after core CPI — which strips out fresh food but includes energy — came in at 2.5% for August, which is still above the Bank of Japan’s 2% target. Chinese indices were the only ones in the green, with Hong Kong’s Hang Seng up 0.5% and mainland China’s CSI 300 up 0.1%, as China gears up for a visit from Indian Prime Minister Narendra Modi.

Over on Wall Street, futures are little changed after all three indices closed in the green yesterday.

THE CLOSING BELL-

The ADX fell 0.6% yesterday on turnover of AED 904.2 mn. The index is up 7.4% YTD.

In the green: Umm Al Qaiwain General Investment (+3.4%), Adnoc L&S (+2.3%) and Gulf Financial Holding (+1.4%).

In the red: E7 (-9.8%), Rapco Investment (-8.4%) and Abu Dhabi National Takaful (-5.3%).

Over on the DFM, the index fell 0.7% on turnover of AED 431.2 mn. Meanwhile, Nasdaq Dubai was down 1.1%.