Euronext: A big chill in the Paris IPO market in 2022

(BFM Bourse) – 2022 will be particularly bad for the Paris IPO market. According to Allegra Finance’s IPO Observatory at Euronext Paris, their number fell by 37% between 2021 and 2022.

2022 will be forgotten on the IPO front. After a record year in 2021, the IPO market collapsed in 2022 due to unfavorable stock market environment and unfavorable geopolitical context.

Between the war in Ukraine, the return of inflation and the uncertainty of the presidential election, these are all factors creating volatility in financial markets. It is difficult for leaders to start a deep stock market bath. So they opted to put the IPO project on hold while they waited for the storm to pass.

Allegra Finance noted in its latest annual report on IPOs that “the global slowdown in IPOs demonstrates the strong impact of the macroeconomic environment on managers’ and investors’ confidence.”

Thus, the listed company lists 36 IPOs in 2022. This is 37% less than in 2021, during which 57 operations were carried out. In terms of volume, 487 million euros were collected last year, which is much less than the 4 billion collected in 2021.

However, the results are not as dramatic as they seem. However, the number of IPOs in the Paris market remains 22% higher than the average of the last 7 years, notes Allegra Finance.

5 IPOs on Euronext Paris

In detail, initial public offerings, which measure initial market activity – that is, excluding direct listings and transfers to another unit – represented just 12 transactions in 2022, compared to 33 transactions in 2021. In the last 7 years, he organized an average of 15 operations. Allegra’s Fiancé.

The regulated market of Euronext Paris, generally accustomed to large-scale fundraising, was not spared the gloom of the IPO market. A total of 5 IPOs were carried out in 2022, which is half as many as in 2021. However, it remains the preferred market for capitalization over €150 million and raising over €110 million. Green hydrogen specialist Lhyfe raised €118 million in May 2022, while Eureking, a “SPAC” (special purpose acquisition vehicle) specializing in the production of biopharmaceuticals, was entrusted with €150 million by qualified investors in May 2022.

Two other “blank check” companies already listed on Euronext continued their activities: I2PO SA merged with Deezer in July 2022, and Teract was a merger between SPAC 2MX Organic and the distribution affiliate of agricultural cooperative InVivo, the owner of Gamm arose as a result. Werth and Jardiland went public last August.

The success of Euronext Growth

In this sensitive environment, Allgera Finance appreciates the attractiveness of the Euronext Growth market. This coupe adapted to small and medium business benefited from new blood. The brokerage firm reminds that in 2022, 10 operations were carried out with a public offering and 193 million euros were attracted. In its annual report, Allegra Finance insists on the dynamics of transfers “between the regulated market and Euronext Growth”, “reflecting the success of this division with SMEs and ETIs”.

In 2022, fourteen companies chose to leave the regulated market of Euronext Paris for Euronext Growth and its less restrictive rules. Atari, Catering International Services, Hopscotch Group, Micropole or, more recently, 2CRSI Euronext Paris have increased the pace of departures from the regulated market to the less restrictive skies.

Three companies (Metavisio, Hopium and Immo Blockchain) were promoted to the top division by a transfer from Euronext Access to Euronext Growth “which is more appropriate for their current size”. And 4 companies directly (Lervolino & Lady Bacardi Entertainment, Eniblock, Racing Force and TaTaTu) are still listed on Euronext Growth.

“Finally, it should be noted that this coupe [Euronext Growth] welcomes more and more companies with a capitalization above 100 million euros. Thus, 8 of the 31 transactions registered in 2022 had a capitalization of more than or equal to 150 million euros on the day of presentation,” said Yannick Petit, CEO of Allegra Finance.

Two sectors stood out in particular in 2022, non-essential goods and services (25%) and high-tech stocks (22%), followed by healthcare stocks (14%) and industrial stocks (11%).

Quite a disappointing performance by the newcomers

2022 was not a great vintage, both in terms of activity and in terms of the performance of the companies that ventured. They are described by Allegra Finance as “fairly disappointing”. Only 2 companies managed to grow above the initial public offering price. The box of the year goes to TaTaTu, a young Italian company specializing in social networks, which panicked counters with a 283% gain after its IPO in October 2022.

In second place is solar tracker specialist OKwind, whose share price has risen 25% since its initial public debut in July last year. On the other side of the spectrum we find Haffner Energy. The green hydrogen specialist, the first company to list on Euronext Paris in 2022, saw its share price fall 77% during the financial year.

The authors of the Vernimmen letter recalled in their final note for 2022 that over the past nine years, a company with a capital of less than 500 million euros “had an 83% chance of falling in price compared to the time of the study.” .

Allegra Finance nevertheless wants to “put into perspective the weak stock performance of companies that have recently entered the financial markets” compared to the CAC40 and CAC Mid & Small indices, which recorded losses of -10.3% and -14.7% respectively over the same period.

What about 2023?

For EY, 2023 promises to be full of IPOs, even if activity remains sluggish at least through the first quarter. “Conditions are favorable for an acceleration of global IPO activity through the second half of the year,” explained EY in its latest IPO market study.

“There are a number of prerequisites for the reactivation of the IPO market: positive sentiment and rising stock market performance; low inflation and an end to interest rate hikes; reducing geopolitical tension; The Covid-19 pandemic in the economy,” recalled Franck Sebag, partner at EY.

Several companies have already announced their intention to go public in 2023. For example, Renault announced last November that it wants to list Ampere, a company engaged in the production and sale of electric cars, on Euronext Paris. Thus, Renault’s press release lists the second half of 2023 as the “earliest” IPO date. Thierry Piéton, for his part, even mentioned an “end of the year” of 2023, depending on market conditions.

Another spin-off operation should be on the agenda this year, 2023. Atos plans to split into two separate companies in accordance with its strategic plan presented in June 2022. The first company will retain the Atos name and combine its historical activities. managing data center infrastructures in significant structural decline.

Therefore, the latter will take the name of Evidia and bring together activities related to digital transformation as well as big data and security (BDS). This split project could be completed in the second half of 2023, with Evidia’s IPO before the end of the year, with shares distributed to Atos holders. According to Les Echos, it is part of this branch that stands out among others by Airbus. But within government, Airbus’ nomination of Atos’ future subsidiary Evidiana is met with little enthusiasm, BFM Business reported on Friday. To be continued…

Sabrina Sadgui – ©2023 BFM Bourse

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