The IPOX® Update 7/5/23

Fondul Proprietatea Raises Record $1.8B in Hidroelectrica's IPO

Fondul Proprietatea, managed by Franklin Templeton, has raised a record $1.8 billion in the IPO of Romania's largest electricity producer, Hidroelectrica. This IPO comes as part of a remarkable week for European IPOs and represents a significant milestone in Romania's recovery and resilience plan, which could unlock EU funds. The proceeds from the sale are likely to be distributed to Fondul’s shareholders. The listing on the Bucharest Stock Exchange may also trigger an upgrade for the exchange, owing to the scale of the transaction. The increased visibility of Hidroelectrica is expected to drive further investments in renewable energy. The offering was priced above its midpoint, leading to a potential haul of $1.8 billion, making it the largest European IPO in the past year, following Porsche AG's €9.1 billion listing. This move signals a resurgence in IPO activity, providing a boost to bankers who had been experiencing an 11-year low in IPO volumes. (Source)

ThyssenKrupp Nucera's IPO Draws High Demand Amid Hydrogen Market Uncertainties

ThyssenKrupp's hydrogen subsidiary, Nucera, which specializes in manufacturing electrolyzers for hydrogen production, is set to go public. Despite the slower-than-anticipated growth of the hydrogen market, demand for Nucera's IPO remains robust. The firm plans to raise between €500-€566 million to expand its operations. Nucera has made a mark among electrolyzer manufacturers by supplying to global firms such as H2 Green Steel, Air Products, Unigel, and Shell. This high demand for the IPO outpacing supply indicates a promising outlook for Nucera, notwithstanding the current uncertainties in the market. With investments in green hydrogen potentially reaching $300 billion worldwide by 2030, the success of this IPO could stimulate further activity in the sector. (Source)

Greece Announces 30% Stake IPO in Athens International Airport for 2024

Marking a significant event for 2024, Greece has declared its plan to IPO a 30% stake in Athens International Airport. This is expected to be the most substantial Greek IPO since 2000, stirring up interest in Athens Stock Exchange listings. The Prime Minister, Kyriakos Mitsotakis, underscores the potential this will offer in terms of depth for the Athens Stock Exchange. Originally, these listing plans were due for the current year but have now been postponed to 2024. The proposed move is expected to boost the Greek economy and indicates a renewed focus on the aviation sector. (Source)

Investcorp Capital Plans $600M IPO Amid Middle East IPO Boom

Middle Eastern asset manager, Investcorp, is reportedly planning a $600 million IPO for its investment vehicle, Investcorp Capital. The IPO is slated for September, with investor meetings potentially beginning next week. HSBC and other major financial groups are managing the offering, which encompasses diverse asset stakes including private equity, real estate, credit, and corporate. The IPO comes amidst a boom in the Middle East since late 2021, despite Investcorp delisting from the Bahrain stock exchange in 2021. The company is now seeking to expand globally, reflecting the region's broader trend towards globalization and diversification. (Source)

Middle Eastern Companies Postpone IPOs to 2024 Amid Global Recession Fears

In light of high inflation and the Russian-Ukrainian crisis, several Middle Eastern companies have decided to postpone their IPO plans to 2024, causing some stagnation in the IPO market. Despite this, the Middle Eastern market persists with listings on the Saudi and UAE stock exchanges. James Palmer from the Bank of America believes that 2024 will see a more concentrated focus on IPOs. Middle Eastern companies continue to demonstrate confidence in the region's structural transformation. This trend has been largely driven by state-led listing programs in Saudi Arabia and the UAE, which catalyzed an IPO wave in 2022. (Source)

Chinese Retail Giant Shein Mulls U.S. IPO Amid Market Volatility

Chinese online retail giant, Shein, is reportedly considering a U.S. IPO amidst ongoing market volatility and geopolitical tensions. Goldman Sachs, Morgan Stanley, and JPMorgan Chase are said to be advising on the potential IPO. Valued at over $60 billion, Shein could become the most valuable China-founded company to list publicly in the U.S. However, the company is facing scrutiny from U.S. lawmakers over its labor practices, which it denies. While no IPO filing has been submitted to the U.S. SEC yet, Shein is navigating through Chinese regulations and geopolitical tensions by relocating its headquarters to Singapore. (Source)

Centre for Policy Studies Advocates for Greater UK Individual Investor Access to IPOs

In a major policy proposal, UK-based think tank Centre for Policy Studies has called for guaranteed access to IPOs for the country's individual investors. The plan aims to unlock £1.8 trillion ($2.3 trillion) of public savings, ushering a cultural shift to prioritize share ownership in the UK and raise investments. In a bid to boost individual share ownership, the UK Treasury is considering lowering regulatory barriers post-Brexit. Amidst rising inflation and mortgage rates, the UK government is pressuring banks to offer improved savings rates. However, challenges persist, as demonstrated by the drop in Deliveroo's share price after allowing retail investors to buy shares through PrimaryBid. (Source)

London Stock Exchange to Adapt Listing Standards for Chinese Companies

The London Stock Exchange (LSE) has announced plans to modify listing standards to facilitate more Chinese listings via the stock connect program. The LSE's strategic move to provide flexibility on accounting standards for Global Depository Receipts aims to heighten its competitiveness. As of now, five Chinese companies have raised $858 million in total by issuing GDRs in London via the Shanghai-London Stock Connect. The LSE anticipates a broader range of Chinese enterprises will be welcomed following the Shenzhen Stock Exchange joining the connect program. Further, the LSE has identified potential growth in China's derivatives market, and has tapped into it via the Tradeweb trading platform. (Source)

Renk GmbH Weighs IPO or Private Sale to Finance Growth

German military gearbox maker, Renk GmbH, is evaluating different avenues to raise capital for growth, including a potential IPO or private share sale. The company aims to avoid debt financing for its expansion. CEO Susanne Wiegand disclosed that Renk, owned by Triton Investment Advisers LLP, could be valued at around €3 billion ($3.3 billion). Renk, a supplier for the German Leopard 2 and French Leclerc tanks, reported sales of €849 million last year. Concerns have been voiced about Germany's industrial policy in its defense industry, as Wiegand indicated that the country lacks a strategic focus. (Source)

Tech IPOs Underperform Despite Nasdaq's Stellar First Half of 2023

Despite Nasdaq experiencing its best half-year in 40 years, tech IPOs in the U.S. have been lagging. Car rental marketplace Turo's IPO has been delayed due to Q1 2023 results, and social media giant Reddit may go public in H2 2023. Just 10 firms have managed to raise $100M+ in U.S. initial share sales in the first half of 2023. However, the successful IPO of the Mediterranean restaurant chain Cava brings a measure of optimism. Major tech firms such as Apple, Amazon, and Microsoft have been primary contributors to the Nasdaq rally, emphasizing the industry's influence despite slow IPO activity. (Source)