The pandemic and associated lockdowns delayed IPOs earlier this year, but in the third quarter many were finally raised off the launchpad. Markets have also held up - thanks to a lot of central bank money. As a result, the Q3 data shows some of the strongest IPOs for years.

The market for global initial offerings – important liquidity events – rebounded during the third quarter of 2020 as equities managed to hold up and as postponed offerings finally made it through to the finishing line, according to EY, the accountancy and professional services group. 

There have been 447 initial public offerings and a total issue volume of 95.0 billion, with the number surging by 78 per cent from a year ago and issue volume rising by 138 per cent.

The third quarter is usually a quiet period for IPOs, the firm said. In the first half of the year, a number of IPOs were postponed due to the virus and, with markets flooded with liquidity, equity markets also rose.

“Everything is different this year,” Tobias Meyer, head of transaction accounting and IPO services in Switzerland for EY, said. “The third quarter, which is usually the weakest quarter, is now the strongest quarter of the year to date.”

The markets in the US and China posted especially strong performance: In China (including Hong Kong), the issue volume grew by 139 per cent to $46.4 billion and the number of transactions climbed from 86 to 217 – an increase of 152 per cent. 

In the US, the number of IPOs more than doubled, rising from 38 to 85 compared with the same period the year before, and the issue volume nearly tripled, jumping from $11.7 to $33.1 billion. IPOs increased in Europe as well – but not as sharply as in other major markets: The issue volume climbed by 51 per cent to $6.2 billion, and the number of IPOs grew by 56 per cent to 39. There were no IPOs in Switzerland in the third quarter, EY said. 

Focus on tech
IPOs were driven by large and prominent transactions in the technology and healthcare sectors: Of the total global issue volume, technology IPOs accounted for 38 per cent – or $36 billion – while healthcare companies made up 18 per cent ($17 billion).

The world’s largest Q3 transaction was the IPO of Chinese chip manufacturer Semiconductor Manufacturing International, which brought in $7.5 billion, followed by US software company Snowflake ($3.9 billion) and Chinese real estate company KE Holdings ($2.4 billion). 

Europe only accounted for one of the top ten IPOs: Britain’s The Hut Group, an e-commerce provider, took in a total of $2.4 billion as part of its IPO.