The UK IPO market is set to “spring back to life” in 2025, according to City brokers Peel Hunt.
“A number of issuers are currently monitoring windows in the second quarter, which we expect to be the first real test of the UK IPO market in 2025,” said Peel Hunt analysts.
In 2024, the UK fell to 35th among all stock exchanges for IPOs, with only five companies worth more than £30m debuting on the London Stock Exchange.
While the UK IPO market focused on founder-led mid cap issuance in 2024, Peel Hunt expected the pipeline to broaden to include more private equity and corporate backed companies this year.
This could include Anglo American spinning off De Beers, or Virgin Active making its debut on the London Stock Exchange.
While January saw limited UK IPO activity, markets had been expecting the first quarter of 2025 to be quiet.
“We still see the backdrop as constructive for IPOs but sustained inflows and more IPO activity will be needed for the market to fully open,” said the analysts.
In contrast, IPO activity has restarted in Europe, with Dutch Ferrari Group, Spanish tech firm HBX Group, and Czech equipment firm Doosan Skoda Power all floating in 2025. In addition, Polish medical diagnostics firm Diagnostyka is set to begin trading today.
This is a good sign for the UK, Peel Hunt’s analysts argued, adding that if combined with a rebound of macroeconomic conditions, the IPO surge on the continent should begin to spread here soon.
In addition, the UK has seen a positive start to its broader equity capital markets activity, with five share sales (excluding IPOs) since the start of the year, worth £563m in total.
Meanwhile, global equity markets have again begun to push against all-time highs, with volatility remaining at supportive levels for IPO issuance.
However, Augmentum Fintech CEO Tim Levene told City AM that he expected the UK IPO market to really pick up in the second half of 2025.
“The reason to be optimistic is that there is a lot of pent up demand, and there are some really good assets that are looking to go public,” the fintech boss said. “Talk to the brokers, and they’ll say there’s a long queue of high quality assets.”
But Levene still argued that the second half of the year was more likely for a revival, as there needed to be a “handful of really successful IPOs” to give investors confidence before the surge back to market kicked off.