By Echo Wang
NEW YORK, Feb 17 (Reuters) - Is the IPO winter finally
easing?
A year after Russia's invasion of Ukraine and an inflation
rally fueled a bout of market volatility that prevented most
initial public offerings in 2022, last week saw a flurry of
listings. It is 15 months since there was a busier week,
according to Dealogic data.
Five IPOs, including the $638 million offering of solar tech
firm Nextracker Inc and the $190 million offering of
Chinese sensor maker Hesai Group , were completed last
week. In total, the IPOs raised about $1.17 billion in proceeds,
up sixfold from the previous week when stock market debuts
raised about $193 million, according to Dealogic.
IPO bankers and lawyers said that if the market's thawing
continues, aided by a decline in market volatility and a rise in
corporate valuations, they expect several major companies
waiting in the wings, including social media firm Reddit and
SoftBank-owned chipmaker Arm Holdings, could launch
their IPOs in the second half of 2023.
"It has been really encouraging to see these
transactions. We see this as step one in a broader IPO market
recovery, with some of the stronger sectors leading the early
supply," said Rob Stowe, co-head of Americas equity capital
markets at Barclays Plc .
IPOs excluding those of blank-check acquisition companies
raised the lowest amount of capital in more than two decades in
2022, with proceeds coming in at $8.7 billion, compared to
$154.1 billion in 2021, according to Dealogic.
Wall Street's fear gauge, the Cboe Volatility Index ,
is down nearly 12% since the start of the year, signaling
reduced investor anxiety and making the launch of IPOs easier.
"I think we're in a market that has at least begun opening,
but it's not open to all issuers yet," said Andrew Wetenhall,
co-head of equity capital markets for the Americas at Morgan
Stanley .
Some companies are waiting for a sustained IPO recovery
before deciding to pull the trigger for their debut, some of the
advisers said. That will likely take at least until the summer
if the market recovery continues, they added.
"It could be into the summer before you begin to see a more
traditional IPO calendar. It's going to be very industry
specific, thematic oriented in this next wave (of IPOs)," said
Michael Wise, JPMorgan's vice chairman for equity
capital markets.
(Reporting by Echo Wang in New York; Editing by Anirban Sen and
Chris Reese)
