The IPOX® Update 2/12/24

Goldman Sachs Anticipates Uplift in U.S. IPO Activity in 2024

According to Goldman Sachs, the U.S. IPO market is expected to see a resurgence in 2024, buoyed by a favorable economic and financial environment. The Goldman Sachs IPO Issuance Barometer reached its highest level since February 2022, indicating a robust outlook for public listings. So far, the year has witnessed 10 IPOs, raising a total of $1.9 billion, predominantly by U.S.-based firms. Factors contributing to this optimistic forecast include smaller equity drawdowns and a decrease in bond yields since October. High-profile IPOs on the horizon for 2024, such as Reddit, Panera, Fanatics, Savers Value Village, Shein, Skims, and General Atlantic, further underscore the market's potential. The Federal Reserve's shift towards a more dovish stance and economic performance surpassing expectations have also played a crucial role in bolstering confidence in the IPO market. If the current momentum persists, IPO activity in 2024 is poised to outpace the levels seen in the previous two years. (Source)

Shawbrook's IPO Could Revitalize London Stock Market

BC Partners and Pollen Street Capital, the owners of British challenger bank Shawbrook, are exploring a potential IPO that may significantly boost the London stock market. Acquired for £868 million in 2017, Shawbrook is eyeing an IPO valuation around £2 billion, marking a significant increase from its 2015 listing valuation of £725 million. Under CEO Marcelino Castrillo's leadership since 2021, the bank reported record pre-tax profits of £233 million in 2022, with a loan book standing at £12.6 billion and deposits at £13.4 billion as of September last year. Despite the early stages of the IPO plans, the move is seen as a positive signal for London's equities market, which has recently faced challenges from inflation, interest rate hikes, geopolitical tensions, and unsuccessful listings. (Source)

SEBI Increases Scrutiny on IPO Documents Amid Surge in Applications

India's market regulator, the Securities and Exchange Board of India (SEBI), is intensifying its scrutiny of IPO documents in response to a surge in public issue applications. With nearly 50 companies launching IPOs in 2023, eight have been completed while 40 await clearance. SEBI's enhanced examination focuses on the authenticity of fundraise intentions, particularly for debt reduction and capital expenditure, leading to the return of six offer documents. The regulator has imposed stricter lock-in periods for promoters, extending to 18 months for debt reduction and three years for capital expenditure purposes. SEBI's actions, led by chairperson Madhabi Puri Buch, aim to curb IPO malpractices, including inflated subscription numbers, safeguarding investor interests and maintaining market integrity. (Source)

Major Korean Companies Poised for IPO Debuts

South Korea is set to witness a series of major IPOs, beginning with APR, a leader in Korea's beauty device market, which is anticipated to achieve a valuation between $850 million to $1.2 billion. APR's impressive market share of 32% and significant global sales growth underscore the company's strong position. With 2024 earnings projected at $656 million and an operating profit of $131 million, the IPO represents a noteworthy opportunity. Other significant IPO candidates include HD Hyundai Marine Solution, Kbank, SGI, Toss, and LG CNS. The increase to 85 expected IPOs in 2023, up from 82 in 2022, reflects a growing trend. High demand from institutional investors for K Weather and COXEM, with competition rates exceeding 1,267:1, highlights the robust interest in Korean IPOs. (Source)

Alibaba Delays IPOs of Cainiao and Freshippo Due to Market Conditions

Chinese conglomerate Alibaba has postponed the IPOs of its logistics arm Cainiao and grocery marketplace Freshippo, attributing the decision to challenging market conditions. Chairman Joseph Tsai emphasized the strategic patience in listing, despite previous plans announced in 2022. Amidst restructuring and increased competition, Alibaba seeks to adapt its business strategy, as evidenced by co-founder Jack Ma's call for change. The company's latest quarterly earnings report revealed a modest sales increase of 5% to $36.7 billion, although net income saw a significant decline. In response, Alibaba announced a $25 billion share repurchase program to bolster investor confidence, amidst a 25% decrease in its New York-listed shares since announcing major restructuring efforts in March 2023. (Source)

Saudi Flour Mill Modern Mills Announces IPO

In a significant move towards privatization, Modern Mills, a leading Saudi flour mill, has announced plans to IPO a 30% stake on the Saudi Exchange main market. The offering involves 24,549,600 common shares, with pricing to be determined post-book-building. The sellers, Mada International, Al Ghurair Foods, and Masafi, will retain a combined 69% shareholding post-IPO. HSBC Saudi Arabia is appointed as the sole financial adviser, while Emirates NBD Capital KSA will serve as joint bookrunner and underwriter. This IPO is part of Saudi Arabia's broader push towards privatization and diversification of its economy. (Source)

Permira Explores Sale or IPO for Best Secret

Private equity firm Permira is considering various options for Best Secret, a German fashion retail club, including a potential IPO that could value the company at over €4 billion. Financial giants Deutsche Bank, JPMorgan, and Goldman Sachs have been enlisted to assess sale and IPO avenues, with interest expected from both financial investors and the broader market. Best Secret reported revenues exceeding €1.2 billion last year, alongside a 15% EBITDA margin, showcasing its strong financial performance. Acquired from Ardian in 2016, Best Secret's potential IPO or sale underscores Permira's strategic investment success and the company's robust market position. (Source)