Markets appear to have settled down at the time of writing (13 Feb) with the FTSE 100 index holding still at 7,177. Volatility, as measured by the Vix index, has also halved at 25.61 from its approximate 50 level last week.

While there is no guarantee that the latest
market sell-off has reached its bottom, the return of more calm conditions is important for companies trying to get their IPOs (initial public offerings) off the ground.

This is relevant as we’re told by many industry people there is a big pipeline of companies preparing to join the London Stock Exchange – either on the Main Market or AIM.

WHAT HAPPENS WHEN MARKETS ARE SHAKY?

IPOs are typically pulled when market conditions are more volatile. Institutional investors are nervous about backing companies if stock markets are experiencing wild up and down movements. They don’t want to be seen putting money into a company if their investment could quickly lose value.

Several IPOs were postponed in other global markets last week amid market jitters. These included Turkish fast food chain operator TFI Tab Food Investments, Argentine biotechnology firm Bioceres and Brazilian pharma group Blau Farmaceutica.

A sharp drop in equities markets also led to several companies pricing their shares below their initial IPO ranges, including airport operator Corporation America Airports and power generator Central Puerto.

IPO WINDOW STILL OPEN?

The latest sign that markets might have passed their worst implies that the IPO window is still open. Indeed, various companies have confirmed plans to proceed with their UK stock market listings.

TruFin says it will join AIM on 21 February, having secured £70m to help support its three lending businesses. It is involved in supply chain finance, invoice finance and dynamic discounting.

The company also owns a 15% stake in consumer P2P lender Zopa – a business which may also soon be part owned by another forthcoming IPO.

Augmentum Fintech is hoping to secure up to £125m in new cash as part of a London stock market listing. The new money will be partially used to buy a portfolio of investments including a 7% stake in Zopa.

TWO INVESTMENT TRUST IPOS

Irish industrial property investor Core Industrial REIT is hoping to secure up to €225m via a listing on AIM. It eventually wants to pay a 6% dividend yield and deliver more than 12.5% total return to shareholders each year. Baillie Gifford US Growth Trust is hoping to raise £250m to invest in companies based in the US or which conduct a significant portion of their business in the country.

Other UK stock market listings in the pipeline include Polarean Imaging, a medical sector specialist scheduled to join AIM on 22 February.

OnTheMarket’s (OTMP:AIM) IPO last week (9 Feb) was somewhat ill-timed as it got caught up in the stock market sell-off. Having only raised just over half of its original fundraise target, the property portal then saw its share price fall 10% on its stock market debut. (DC)

OTHER CONFIRMED LONDON IPOs

Chargemaster – electric vehicle charging infrastructure

IntegraFin – owner of IFA platform Transact

Fastbase – website analytics group

RUMOURED LONDON MARKET IPOS

Aston Martin – carmaker

Avast – antivirus software firm

GEMS Education – private school operator

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