By Echo Wang and Abhinav Ramnarayan
(Reuters) – Initial public offerings (IPO) globally slowed in the third quarter of 2021 from their previous frenetic pace, but the number of listings in the first nine months of the year still was the highest since the dotcom bubble of 2000, according to Refinitiv data.
The third quarter saw a drop in IPO activity of 26.3% compared to the second quarter. This was due to the slowdown of summer and increased scrutiny by the U.S. of Chinese listings after Beijing cracked down on DiDi Global Inc, just days following its New York IPO.
Globally, over 2,000 IPOs raised a total of $421 billion in the third quarter. This record-breaking amount was achieved as private companies rushed towards the high valuations attained by their publicly listed counterparts. It was almost twice as much money raised last year.
The number of IPOs for 486 SPACs (special purpose acquisition companies) in the first nine month of this year totaled $127.7 million.
This market needs to take a pause, after the record SPAC IPO volume in the first quarter. However, we are seeing early signs of that market begin to normalize and open up for the right issuers,” said David Ludwig, global head of equity capital markets at Goldman Sachs Group Inc (NYSE:).
Among the third quarter’s high-profile IPOs were trading app Robinhood Markets Inc (NASDAQ:)’s $2.1 billion listing in New York and South Korean software company Krafton Inc that raised more than $3.7 billion on the Korean stock exchange.
Tencent-backed Chinese online media company Kuaishou Technology Co Ltd’s $5.4 Billion IPO is currently the biggest.
Gary Gensler, Chair of the U.S. Securities and Exchange Commission asked for a “pause” in U.S. IPOs Chinese companies. He also requested more information about offshore structures and potential regulatory risks they might face in China. The United States’ Chinese listing of Chinese companies came to a halt. Chinese listing sales reached an all-time high of $12.8 billion in the first seven months.[L1N2PU1GE]
Even though valuations are being scrutinised closer, tech listings remain a darling of investors. Stock market debutantes had a wider range of industries. Taylor Swift’s Universal record label made its debut in Europe on the Amsterdam Stock Exchange. This was the biggest company to list this year on Europe.
Volvo Cars (OTC:) will also launch an IPO, while Daimler(OTC:), is likely to list its truck unit in order to diversify the stock market offering to investors.
Ludwig indicated that IPO activity could increase in the fourth quarter. Ludwig stated that there is a strong backlog across sectors and across all regions of IPOs.
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