The City is set for a revival in new companies listing shares on the London Stock Exchange, with a number of ‘jumbo issuers’ potentially coming to market next year, according to leading broker Peel Hunt.
The UK market environment is looking ‘increasingly supportive’ for fresh initial public offerings (IPOs), as the FTSE 100 hits all-time highs and trade tariff-induced volatility eases, the broker’s analysts wrote in a note on Friday.
It follows a prolonged drought in UK IPO activity since a flurry of new issuances in 2021 largely disappointed.
Meanwhile, potential new companies have been lured by the chance for high valuations and better liquidity to list on rival exchanges in the US.
Renewed optimism follows Beauty Tech Group’s announcement of its intention to list in London earlier this week.
Peel Hunt said: ‘The UK pipeline of potential IPO candidates continues to build, both for later this year and next. IPO activity has already restarted post- summer, and we expect that to pick up further over the coming weeks.’
The broker cited ‘numerous candidates, both in the UK and Europe’ it says are ‘monitoring near-term windows’ and ‘holding de-risking processes with investors’ before making a final decision to launch.
It said that while the near-term UK IPO pipeline looks set to continue to be dominated by mid-cap companies – those with a market capitalisation of £1billion to £5billion – ‘a number of jumbo issuers are monitoring windows in 2026’.
London’s public markets saw nine new listings in the first half of the year, raising just £182.8million, and lagging US and European activity.
UK IPO activity has been muted for a number of years, with eight in the first of last year generating £526.7million and nine in the second half raising £258million, according to analysis by law firm White & Case.
Recently announced IPO activity in Europe include SMG in Zurich and NOBA Bank in Stockholm, while the $1.37billion Klarna listing in the US saw shares soar 30 per cent on their first day of trading
Peel Hunt added: ‘Following a quiet 1H, 2H is expected to see the first real test of the UK IPO market in some time.
‘Seeing some IPOs come to market and trade successfully will be important to give confidence to the broader pipeline.’
Peel Hunt said: ‘We have been talking for some time about the improving backdrop for UK IPOs; however, we have lacked transaction datapoints to fully prove that.
‘With UK IPO issuers now increasingly lining up, it is important that we now see some successful conversion of the pipeline to help build confidence and encourage others to come to market.’
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