The IPOX® Update 11/15/23

Renault Targets Ampere IPO for EV Business Expansion

French automaker Renault is strategically realigning its business to strengthen its position in the electric vehicle (EV) market. The company plans to offload its 28% stake in Japanese automaker Nissan, valued at approximately €4.3 billion, to finance this shift. This move is part of Renault's broader aim to generate over €10 billion in revenue by 2025 from its EV business, Ampere. The proposed Ampere IPO, potentially in Spring 2024, is expected to value the unit between €8-10 billion. However, Renault may consider alternatives like a spinoff if the IPO valuation is unsatisfactory. The potential IPO is attracting interest from various investors, including Nissan, Mitsubishi, and Qualcomm, with Mitsubishi considering an investment up to €800 million. This strategic shift reflects Renault’s ambition to compete with major players like Tesla and Chinese EV manufacturers in a challenging IPO market. (Source)

Morocco's Neo Motors Prepares for IPO on Casablanca Stock Exchange

First Moroccan domestic carmaker Neo Motors is gearing up for its IPO on Morocco's main stock exchange. Founded in 2017, Neo Motors has emerged as a key player in Morocco's strategy to become a manufacturing hub. The company's debut vehicle, a $20,000 three-door model, competes with established brands like Renault's Dacia and various Chinese manufacturers. CEO Nassim Belkhayat is steering Neo Motors towards an ambitious production target of 15,000 vehicles annually within three years, focusing on both traditional and electric vehicles (EVs). The company has garnered significant support, including a $4.9 million investment from King Mohammed VI for its Ain Aouda plant. By emulating Volkswagen's approach of local production and sourcing, Neo Motors is poised to make a significant impact in the automotive sector. This upcoming IPO is a testament to the growing importance of Morocco in the global automotive landscape. (Source)

iMotion Automotive Technology Set for $100 Million Hong Kong IPO

iMotion Automotive Technology, a Chinese company specializing in self-driving technology, is preparing for a $100 million IPO in Hong Kong. Established in 2016 and headquartered in Suzhou, China, iMotion is capitalizing on the country's push for smart vehicle innovation and autonomous driving standards by 2025. Initially, iMotion aimed to raise $300 million but adjusted its target amid current market volatility. This IPO is notable as one of the first overseas share sales under China's new rules implemented in March. It marks a significant moment for Hong Kong's IPO market, which has seen a 32.5% decrease in IPOs in the first three quarters of the year. iMotion's listing, scheduled for the last week of November with trading expected in the first week of December, could inject momentum into the Hong Kong IPO scene, despite the challenging year it has faced. (Source)

KOSPI Experiences Weakest IPO Year in Half a Decade

South Korea's primary stock market, the Korea Composite Stock Price Index (KOSPI), is witnessing its weakest year for Initial Public Offerings (IPOs) in five years. In 2023, only five companies have listed so far, with expectations for three more, totaling eight for the year. This figure is close to the 10-year average of 9.6 IPOs annually. However, the total capital raised this year is significantly lower, amounting to 501.7 billion won (approximately $385 million). The absence of large deals has been a contributing factor, mirroring trends observed in 2013 and 2018. The subdued IPO activity reflects broader market volatility and investor caution, with a market recovery reliant on various macroeconomic factors and increased stock market funding. Despite the challenging environment, the KOSPI remains a vital gauge of South Korea's economic health and investor sentiment. (Source)

US Government Shutdown Looms, Threatening the IPO Market

The potential shutdown of the US government on November 18 poses a significant risk to the IPO market. In 2023, the US IPO market has mirrored the low levels of 2022, marking the weakest period in over a decade. A government shutdown would lead to limited operations at the Securities and Exchange Commission (SEC), hindering new IPO filings and pricing approvals. The market has already been impacted by Federal Reserve rate hikes, widespread investor caution, and geopolitical tensions. So far, 2023 has seen US IPOs raise a mere $24.7 billion, a 92% decrease from 2021's record levels. A house vote on a temporary funding plan could avert the shutdown, but uncertainty remains. This situation underscores the fragile state of the IPO market in the US and highlights the importance of stable government operations for financial markets. (Source)