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Market Tracker has conducted research to examine the current trends in IPO activity between 1 July 2021 and 30 September 2021.

Background and approach

This Market Tracker update reviews IPO activity between 1 July 2021 and 30 September 2021 (Q3 2021).

It looks at IPOs on AIM and the Main Market (both premium and standard listings). Introductions and transfers between markets have not been included in the statistics (unless otherwise stated). We reviewed a total of 34 IPOs during this period (13 on the Main Market and 20 on AIM), and an additional 8 that were announced during Q3 2021 but had not, at the time of writing, completed an IPO.

Market capitalisation is based on the offer price and as stated in the company’s prospectus. Market capitalisation and gross proceeds figures have been rounded to the nearest million (where expressed in millions) and have been rounded to the nearest hundred million (where expressed in billions).

Transaction highlights

In our H1 2021 report we noted that IPO activity in London had seen continued momentum during the first half of the year which has been maintained throughout the third quarter with a strong quarterly performance on both the Main Market and AIM.

The Main Market saw 13 companies completing IPOs, with a combined market capitalisation of £4.3bn in Q3 2021 and a further 20 companies completed IPOs on AIM with an aggregate market capitalisation of £2.7bn.

Transaction volume–Main Market

Main Market IPO deal volume hit new heights in the first three quarters of 2021, with a total of 39 companies successfully admitted to trading on the Main Market making it the busiest first three quarters on record in the last four years. This sustained increase in activity followed on from the dramatic increase in IPO volume seen in the Q4 2020, reflecting the increase in investor appetite due to pent-up demand after a prolonged period of COVID-19 pandemic related market volatility and increased investor caution.

Notable Main Market IPOs in the third quarter were:

• Private equity firm Bridgepoint Group plc (market capitalisation £2.88²ú²Ô)
• Baltic Classifieds Group plc, the online classifieds group operating in Baltic states (market capitalisation £825³¾)
• Seraphim Space Investment Trust plc, an investment company which will invest in space tech businesses (market capitalisation £263³¾)

Q3 also saw 8 out of the 13 companies completing IPOs on the Main Market being special purpose acquisition companies (SPACs). Amended listing rules and FCA guidance relating to the listing of SPACs came into force during Q3 on 10 August 2021, following the FCA consultation which launched in April 2021 in response to recommendations made by Lord Hill’s UK Listing Review (for more information, see Practice Note: (a subscription to Lexis®PSL Corporate is required)).

The amended rules provide that a listed SPAC’s shares will not be suspended on announcement or leak of an acquisition where the SPAC satisfies certain conditions and disclosure requirements including a minimum cash fundraise at IPO of £100m and a time limit of two years for making an acquisition (which can be extended for a further year with shareholder approval and an extra six months in limited circumstances). The FCA proposed these changes to the Listing Rules to encourage a wider range of SPAC listings with stronger investor protection features. Hambro Perks Acquisition Company was admitted to the Main Market on 30 November 2021 having raised £150³¾ making it the first SPAC to list under the revised listing rules (see: Hambro Perks plans to float first SPAC under new listing rules).

Transaction volume–AIM

Q1-Q3 2021 saw 43 companies completing AIM IPOs, a significant 84%  increase in activity compared with Q1-Q3 2020. 2020 was a particularly slow year for IPO activity on AIM with Q2 2020 seeing no new listings at all. 

Notable IPOs on AIM in the third quarter were:

• Big Technologies plc, a designer of tracking devices (market capitalisation £577³¾)
• Make-up retailer, Revolution Beauty Group plc (market capitalisation £495³¾)
• Specialist investment bank, Peel Hunt Limited (market capitalisation £280³¾)
• Property finance platform, LendInvest plc (market capitalisation £256³¾)

Main Market segments

Q3 2021 saw eight companies opt for a standard listing on the Main Market and five companies listing on the premium listing segment. All eight IPOs on the standard segment were SPAC listings.

HydrogenOne Capital Growth plc, Bridgepoint Group plc, Seraphine Group plc, Seraphim Space Investment Trust plc and Baltic Classifieds Group plc were all admitted to the premium listing segment of the Main Market in Q3 2021.

A standard listing is attractive to those companies which are not eligible for a premium listing but wish to obtain the benefits of being listed on the Official List. In addition, a company with a standard listing is not required to comply with many of the continuing obligations imposed on premium listed companies, including complying with the UK Corporate Governance Code, which leads to lower compliance costs.

Companies with a dual class share structure (DCSS), where one class has weighted voting rights allowing the holder to retain voting control of the company, are also permitted on the standard listing segment but not on the premium listing segment at present. This may change following proposals in the FCA’s consultation paper published in July 2021 which addressed recommendations made in Lord Hill’s Listing Review.

Three companies have listed with a DCSS in the last 15 months including Wise Plc which listed by means of an introduction in July 2021. These share structures have proved controversial with investors.

Wise plc’s class A shares were admitted to the standard segment of the Main Market of the London Stock Exchange on 7 July 2021. The company’s IPO garnered significant attention for its unusual direct listing, with no fundraising element, in conjunction with the choice to undertake a DCSS (for more information, see: Wise move to undertake dual class share structure in direct listing IPO).

THG plc, which debuted on the standard listing segment in Q3 2020 with a DCSS, recently announced its intention to apply for a premium listing, to end its DCSS and adopt higher corporate governance standards in order to appease investors (for more information, see: THG abandons special share to seek premium listing and restore investor confidence). 

Market capitalisation in Q3 (2019 – 2021)–Main Market

The aggregate market capitalisation of companies admitted to trading on the Main Market in Q3 2021 was £4.3bn, slightly lower than Q3 2020.

Top Main Market IPO by market capitalisation in Q3 2021:

Company: Bridgepoint Group plc

Date admitted to trading: 29 June 2021

Country of incorporation: England and Wales

Market: Main Market (premium segment)

Market capitalisation: £2.88²ú²Ô

Sector: Investment

Reason for offer/use of proceeds: Acquisition and Support future growth

Market capitalisation in Q3 (2019 – 2021)–AIM

Aggregate market capitalisation on AIM in Q3 was significantly higher than in previous years, reaching £2.7bn in total during the period, an 89% increase from £328m in Q3 2020. The largest AIM transaction in Q3 2021 was Big Technologies plc’s £577³¾ IPO, the fifth largest IPO in AIM’s history.

Top AIM IPO by market capitalisation in Q3 2021:

Company: Big Technologies plc

Date admitted to trading: 14 July 2021

Country of incorporation: England and Wales

Market: AIM

Market capitalisation: £577³¾

Sector: Computing & IT

Reason for offer/use of proceeds: Support future growth

Country of incorporation

Of the IPOs completed in Q3 2021, 80% (28) were by companies incorporated in England and Wales, a slight decrease compared to Q3 2020, during which 65% of the companies admitted to trading were incorporated in England and Wales. The remaining 20% were companies incorporated in Guernsey (2), Jersey (2), the British Virgin Islands (1), USA (1) and Canada (1).

Country of operation

Of the IPOs completed in Q3 2021, 50% (23) had operations outside of the UK, much less than the 79% of companies admitted to training in Q3 2020 which operated either globally or in a region outside (or in addition to) the UK.

IPOs admitted to trading in Q3 2021–Main Market

IPOs admitted to trading in Q3 2021–AIM

Further reading

For more information regarding some of the transactions covered in this report see our blog posts:

• Law firms capitalise on a busy IPO market – who acted on the key deals in H1 2021?
• Wise move to undertake dual class share structure in direct listing IPO
• Spotlight on SPACs