London is IPO capital of Europe with over 100 firms floating in 2021 1

London is IPO capital of Europe with over 100 firms floating in 2021

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The City of London has retained its crown as the hottest market in Europe for new companies to list on the stock market.

Around £13.9billion was raised through floats in the Square Mile over the last year, beating its closest continental rivals Stockholm and Amsterdam, which raised £9.4billion and £7.2billion respectively. Frankfurt, sometimes touted as a rival to London, lagged further behind, on £6.9billion.

The white-hot market also showed no signs of cooling in the run-up to Christmas, with Graft Polymer, a maker of drug delivery and polymer modification systems, unveiling plans yesterday to list on the main London Stock Exchange (LSE) market in early January.

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Listings capital: Around £13.9bn was raised through floats in the Square Mile over the last year, beating its closest continental rivals Stockholm and Amsterdam

Listings capital: Around £13.9bn was raised through floats in the Square Mile over the last year, beating its closest continental rivals Stockholm and Amsterdam

The firm is aiming to raise £5million by offering shares at 21.5p each, giving it a market value of around £22.4million.

This comes after a bumper year for London listings despite the volatility caused by the pandemic, according to analysis from accountancy giant KPMG. 

It also defies gloomy predictions that the City would lose power and influence as a financial centre as a result of Brexit.

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A total of 108 companies came to market between the start of January and the end of November, more than in 2020 and 2019 combined. 

Of these, 53 debuted on the main market of the LSE, raising £11billion, an increase from 22 in 2020 and 25 in 2019.

The junior market, AIM, saw 55 floats compared with 16 last year and 10 in 2019. These listings raised £2.9billion. Deliveroo was the largest listing this year, raking in £1.5billion.

Next came boot maker Dr Martens, which raised just under £1.3billion, followed by private equity firm Petershill Partners, which raised £1billion. KPMG attributed the rush to pent-up investor demand built up over the Covid-19 period, combined with strong equity market conditions.

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Financial services was a key sector, accounting for 35 per cent of funds raised from listings during the year. 

Close behind was the technology, media, and telecoms sector, which accounted for 32 per cent of new funding and included fast-growing tech outfits such as cybersecurity firm Darktrace.

London also continued to be a lucrative market for already-quoted firms to raise cash as the pandemic hit balance sheets. 

Companies tapped investors for £24.5billion in 2021. While that was down from the record £34.3billion in 2020, it was still higher than the 2019 figure of £15.7billion.

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The top fundraiser was insurer Prudential, which raked in £1.77billion in cash from investors, followed by travel group Tui, which raised £1.74billion.

KPMG said this year’s fundraisings were different from last year, when firms sought cash to survive ‘uncertain, and for many, challenging trading conditions’. 

Instead, companies sought money for investment opportunities and growth. But despite the booming number of floats, newly listed companies had ‘wildly diverging’ fortunes after they listed, KPMG said.

One of the best performers was Auction Technology Group, a provider of online auction platform. Its value soared 110 per cent following its debut in February.

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By contrast, the worst-performer, meal delivery firm Parsley Box, has lost over 80 per cent of its value since listing in March after being hammered by supply chain issues and a fall in demand following the end of lockdown.

The group made matters worse yesterday when it unveiled plans to go cap in hand to investors to raise more capital, sending shares down 6.5p to 36.5p.

Reforms to listing rules, aimed at making the City even more alluring to fast-growing tech firms recently came into force.

Svetlana Marriott, partner in KPMG’s UK capital markets advisory group, said: “It’s fantastic to see London keeping its status as the leading European market as we continue to grapple with the knock-on effects of the pandemic.’

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