Companies raise €265m on ISE

Companies raised €265m on the Irish Stock Exchange through initial public offerings over the first three months of this year, compared with €415m over the last quarter of 2013, according to figures compiled by PwC.

However, the trend across the rest of Europe has been a much stronger start to this year. The amount of money raised over the first three months exceeded €11.4bn, which is more than the first quarters over the past four years combined.

Moreover, the pipeline for the second quarter looks equally busy with 25 companies across the region scheduled to go public with possible proceeds expected to exceed €10bn, said PwC.

“This quarter is the first time since 2007 that we have witnessed such high volumes in the IPO markets across most of Europe. In the last two quarters we’ve seen larger deals, high subscription levels and good after-market performance, all signs of a wide-open IPO window,” said Denis O’Connor, Transaction Services Partner PwC Ireland. “We are also still seeing a degree of residual caution in the market which means IPO candidates must still present a clear and well substantiated equity story if they want to be part of must-own deals.”

The European IPO market seized up in the wake of the financial crisis in 2008. However, bank lending remains constrained throughout the region as institutions struggle with high levels of non-performing loans, looming stress tests and higher capital requirements.

In the US, corporates raise 85% of their funding needs through the capital markets. Before the crisis, European companies raised 85% of their funding needs through bank lending. The Commission has been working on plans to encourage EU firms to look to the markets to raise more finance.

According to PwC, London tripled the proceeds raised on its exchanges in the first quarter, posting close to €5.9bn compared with €1.9bn in the same quarter of 2013. Of the €5.9bn raised, the main market hosted 14 IPOs, raising €4.6bn while the remaining €1.3bn was generated on the AIM market.

Across the London exchanges, eight retail IPOs, in the Consumer Services sector, raised €2.8bn, including Lenta, the largest retail IPO in Europe in Q1 2014.