The IPOX® Update 12/6/23

Global IPO Market Shows Signs of Recovery

According to UBS Group AG, there are indications of a potential rebound in the global IPO market, driven by an upswing in business confidence. Investor sentiment is buoyed by the prospects of a soft economic landing. The expectation of central bank rate cuts in 2024 is further bolstering market conditions. While the current market is experiencing a slowdown, UBS suggests the possibility of a 'short and sharp' business cycle completion. This outlook is underpinned by the high activity of Wall Street banks during the pandemic, suggesting an underlying market strength. Current levels of M&A, though lower than peak periods, are on par with figures from 2013, indicating a resilient market. Furthermore, the trend in additional offerings remains stable, marginally outperforming the levels observed in 2022. This analysis by UBS Group AG paints a cautiously optimistic picture for the IPO market in the near future. (Source)

Mumbai Tops Global IPO Count in 2023

Mumbai has emerged as a leader in the global IPO market in 2023, surpassing major Chinese financial centers. This trend reflects the growing economic strength of India, with Indian IPOs expected to outpace Hong Kong in fundraising. However, analysts express concerns over 'irrational exuberance' in the country's small-cap IPO market. The Indian Sensex index has witnessed a notable gain of 10.3% in 2023, outperforming its Chinese and Hong Kong counterparts. In contrast, Hong Kong's IPO fundraising is projected to decline by 58% to $5.3 billion, ranking it sixth globally. The surge in Indian IPOs is attributed to a pre-election rush and pragmatic valuation approaches, influenced by rising income levels and lower interest rates, which are shifting investor preference towards equities. (Source)

Ola Electric Adjusts Sales Targets Ahead of IPO

Ola Electric, an Indian e-scooter firm backed by IPOX® International (ETF: FPXI) holding SoftBank, has revised its sales targets for 2023-2025 downwards by over 50% in preparation for its IPO. This adjustment follows government subsidy cuts, impacting the company's profitability timeline. Ola Electric, aiming for a $700 million stock market debut, now anticipates 300,000 e-scooter sales in the fiscal year 2023-24, with a revenue target of $591 million, reduced from the previous $1.55 billion. Despite these challenges, Ola Electric continues to lead India's e-scooter market. (Source)

ByteDance Proposes $5 Billion Share Buyback Amid IPO Uncertainty

ByteDance, the parent company of TikTok, has proposed a substantial $5 billion share buyback, pricing shares at $160 each and valuing the company at a massive $268 billion. This valuation reflects a 10% decrease from last year's $3 billion share buyback plan. As China's most valuable unicorn, ByteDance's worth is bolstered by TikTok's success in the US, which is called Douyin in China. This move comes amidst uncertainty surrounding ByteDance's IPO plans. (Source)

Southwest Gas Announces Centuri IPO for 2024

Nevada-based Southwest Gas plans to spin off its energy utility infrastructure unit, Centuri, in the spring or summer of 2024. With a confidential draft Registration Statement already submitted to the SEC, the IPO aims to primarily address Centuri's outstanding debt. Post-IPO, Southwest Gas intends to reduce its ownership in Centuri through sales or exchange offers. (Source)

Capital A Berhad Prepares for AirAsia Philippines IPO

Capital A Berhad, the Malaysian low-cost airline trading as AirAsia, is planning an IPO for its Philippine operations following a recent securing of $179 million in debt financing and plans for a $200 million revenue bond. The group's decision is influenced by current market conditions and financial performance. (Source)

Nio Plans Spinoff of Battery Manufacturing Unit

Chinese electric vehicle maker Nio is planning to spin off its battery manufacturing unit by the end of 2023. The spinoff is designed to attract external investors, with the valuation to be determined later. Key assets for the spinoff include a planned plant in China's Anhui province and intellectual property. Top battery engineers from Nio will join the new firm, with some staff merging into other departments. While Nio has not commented on the details of the spinoff, the move is part of its strategy to achieve profitability and improve operational efficiency. Nio is addressing its growing losses, including a 4.56 billion yuan ($637.06 million) loss in Q3, through this strategic reorganization and focus on outsourcing battery production. (Source)

Pharvaris Shares Surge After Successful Phase 2 Trial Results

Shares of biopharma firm Pharvaris, a member of the IPOX® Europe Index (ETF: FPXE), experienced a significant surge of approximately 48% in pre-market trading following the announcement of successful Phase 2 trial results. The trial, focused on the company's lead product, deucrictibant, showed a 84.5% reduction in hereditary angioedema (HAE) attacks. The 40 mg/day dose of deucrictibant was proven to be statistically and clinically effective. This clinical trial involved 34 participants and yielded favorable safety and tolerance results. Pharvaris plans to present these findings at upcoming medical events and aims to submit the data to the FDA by the end of the year. In conjunction with these developments, the company also announced an underwritten stock offering aiming to raise approximately $300M. This offering includes around 11.1M shares priced at $24.50 each, alongside pre-funded warrants. (Source)

Schott Pharma's Shares to Join SDax Index Following Market Debut

Schott Pharma, the recent pharmaceutical glass spin-off of the German glass manufacturer Schott and a member of the IPOX® Europe Index (ETF: FPXE), is set to have its shares included in the German small-cap focused SDax benchmark on December 18th. Specializing in the production of glass vials, bottles, and syringes for medicines and vaccines, Schott Pharma first traded its shares on the Frankfurt Stock Exchange on September 28th. The upcoming listing in the SDax is expected to significantly enhance the company's visibility in global capital markets. This milestone is particularly important as funds that replicate indices will increase demand for shares for Schott Pharma. (Source)