The Strategist

Companies raise record $350B in IPOs in 2021

06/28/2021 - 03:46

Companies around the world raised a record $350bn in IPOs in the first half of 2021. Online retailers and renewable energy firms were particularly popular. The boom in IPOs was fuelled by rising stock markets and private investor activity.

James Smith
James Smith
For the first six months of 2021, companies around the world raised about $ 350 billion at their IPOs, says Bloomberg citing its own data. Thus, the global IPO market broke the record of the second half of last year, when the volume of initial public offerings amounted to about $282 billion. 

The global IPO boom began in 2020 amid a pandemic of coronavirus: the market was then dominated by technology for remote working and home entertainment, writes Bloomberg. Now, renewable energy companies and online retailers are also attracting special interest from investors, the agency notes.

However, technological companies continue to be popular. One of the largest initial public offerings of 2021 in the U.S. could be the listing of the Chinese taxi service Didi, which expects to receive valuation of more than $ 60 billion and attract more than $ 4 billion during the IPO in New York.

Record initial public offerings this year are largely due to rising stock markets and the activity of private investors willing to buy shares of favorite companies, notes Bloomberg. In this case, the interest in SPAC, which was observed last year, is gradually receding: if in the first quarter of 2021 they accounted for almost half of the raised IPO funds, and now the figure is about 13%. The growth of the IPO market, according to the agency, is also supported by cash injections into national economies by central banks. 

The main beneficiaries of this situation are the world's investment banks, which earn on consulting services and underwriting. It has become more difficult for companies wanting to go public: the oversaturation of the market has made investors much more selective. As a result, several high-profile IPOs have failed: Deliveroo, a food-delivery startup, dropped 26% on its first day of trading in London, and insurance startup Oscar Health lost 40% after listing on the New York Stock Exchange.