PWC - IPO Watch Europe, H1 2023

The H1 2023 edition of PwC's IPO Watch Europe reports that the European and UK IPO markets were largely closed in Q2 2023, with only a handful of deals pricing and some struggling in the aftermarket. Despite this, the IPO pipeline continues to grow and issuers are spending more time preparing for their potential listings, focusing on areas such as embedding ESG strategy, enhancing the risk and controls environment, and improving corporate governance. Valuation and appropriate IPO discount remain front of mind for investors, but attractive valuation may not be enough to attract investor appetite. Issuers and bankers are looking for ways to innovate in order to get deals done, such as fixed price IPOs, compressed roadshows, and reduced overall marketing periods to limit market exposure. The UK investment community is currently busy digesting the FCA’s primary market effectiveness review consultation and its proposed changes together with a long-awaited FRC’s consultation on the UK Corporate Governance Code (the Code). The primary market review is supporting efforts to make the UK capital markets more attractive for issuers and the consultation on the Code is designed to ensure companies have a more robust approach to internal controls. The increased investment into UK equities by the pension funds industry and others in the institutional investment community will be key to making the UK capital markets more attractive. Overall, the report suggests that while the IPO market may be slow at present, issuers and investors are still looking for ways to innovate and improve the IPO process. The regulatory environment is also evolving to make the capital markets more attractive for issuers, and increased investment from institutional investors will be key to driving growth in the UK capital markets.