Making Sense Are conditions favorable for an IPO market boom?
Jun 3, 2025
In this discussion, Keith Canton, the Head of Americas Equity Capital Markets, and Gaurav Maria, the Head of U.S. Equity-Linked Capital Markets, delve into the IPO market's recent performance. They analyze the decline in IPO volumes, driven by market volatility and geopolitical tensions. The duo highlights innovative strategies within the convertible market and discusses the emerging sector diversity in IPOs. With cautious optimism, they explore factors that could spark a resurgence, including refinancing opportunities and market resilience.
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IPO Market Recovery in 2025
- The IPO market in early 2025 raised about $12 billion, below expectations but recovering from a steep drop after 2021's boom.
- Tariff announcements and increased volatility slowed activity, but recent stabilization of market volatility could improve IPO issuance.
Volatility Boosts Convertibles
- Convertible bond issuance is robust and benefited from market volatility in 2025.
- Volatility improves convertible pricing and attracts investors due to downside protection with upside potential.
Sector Differences in IPO Activity
- Different sectors face distinct challenges in the IPO market; tariff-affected sectors like hardware are slower to return than financial technology or software.
- The follow-on market sees broad sector participation as investors can price known risks more easily than IPO uncertainties.