IPO activity in the US had the strongest first quarter in the year 2021, continuing the strong momentum seen in the second half of the year.
According to the research data analyzed and published by Finaria, a total of 389 IPOs raised a collective $125 billion during Q1 2021. That was an astounding increase from the 33 IPOs that raised $10 billion in Q1 2020. It was also higher than the 338 issuances that generated a cumulative $117 billion in H2 2020.
Notably, there were only 91 traditional IPOs in Q1 2021, which raised $38 billion in total. Traditional issuance activity has only fluctuated to a small extent in the past three quarters. In Q2 2020, there were 36 issuances, rising to 70 in Q3 2020 and falling to 57 in Q4 2020.
On the other hand, it has been a steady upward climb for special purpose acquisition companies (SPAC) IPOs. In the first three months of 2021, there were more SPAC IPOs than the ones that took place in the whole of 2020.
A total of 298 SPACs raised a collective $87 billion during the period. That was three times the number of similar issuances in Q3 2020 when the trend first started gaining popularity. At the end of the first quarter of 2021, companies had completed 24 SPAC mergers.
It is interesting to note that returns on SPACs were close to double than those of traditional issuances. For the ones that completed mergers during the quarter, there was a healthy 27% return. IPOs, on the other hand, posted a 15% return.
Both forms of issuances significantly outperformed key indices, as the S&P 500 gained 6% and the NASDAQ, 3% during the period.
Global IPO Market Sets Five-Year Record with 458 Traditional IPOs Raising $96 Billion
On the global IPO landscape, the situation is strikingly similar. According to KPMG analysis which was released on March 24, 2021, the global IPO market in Q1 2021 raised the highest amount on record in five years.
A total of 458 traditional IPOs raised a cumulative $96 billion in the period. In the corresponding period in 2020, there were 252 issuances that raised $30 billion. Q1 2019 saw a total of 252 issuances raising $15 billion.
During the period of Q1 2021 covered in the KPMG report, the US, Hong Kong and A-share markets took the lead globally. They raised a total of $61.4 billion, accounting for a 63% share of global proceeds.
NASDAQ was the leading stock exchange with a total of $22.1 billion in traditional IPO proceeds. That was four times its proceeds for Q1 2020, which totaled $5.5 billion.
The New York Stock Exchange came in second with $15.6 billion. HKEX raised $13.9 billion, ranking third while the Shanghai Stock Exchange took fourth spot with $6.9 billion. Rounding off the top five was the London Stock Exchange, whose proceeds totaled $5.5 billion.
For the whole of Q1, NASDAQ had a record total of 275 issuances (traditional and SPACS) that raised $74.4 billion. Out of the total number of issuances, 196 were SPACs. Its total issuances for the quarter were equivalent to 87% of all IPOs listed in the whole of 2020.
In the month of March 2021 alone, it had a total of 98 IPOs, 70 of which were SPACs. Total proceeds for the month hit $26 billion, with seven of the 10 largest issuances listing on the exchange.
Proceeds from Asian First-Time Issuances Jumped by 154% to $49.3 Billion
As was the case in the US as well as on the global market, Asia too had its strongest ever Q1 on record. According to a Bloomberg report, Asian companies notched a record $49.3 billion on first-time share issuances both at home and abroad. Compared to the first quarter of 2020, the total proceeds were up an incredible 154% YoY.
Thanks to the strong economic recovery of China, the number of listings on the A-share IPO market nearly doubled from Q1 2020. There were 99 deals valued at a collective 75.9 billion RMB. In terms of deal numbers, that was a 94% YoY increase. Funds raised, however, tumbled by 3% YoY due to the absence of mega deals.
Market sentiment was also positive in the Hong Kong market, which according to KPMG had 32 deals during the quarter. From the total HKD 132.7 billion that was raised in the market, three Chinese listings accounted for HKD 92.4 billion, a 70% share.
In comparison with Q1 2020, total funds raised were eight times higher. KPMG attributed the increase to homecoming listings. These raised HKD 49.5 billion accounting for a 37% share of the total.