There was a time when an IPO (short for initial public offering) was a sign that optimism had returned to markets.
Companies listing shares, investors lining up to back growth stories, and champagne in City boardrooms. These days, it feels more like an occasional flicker than a revival.
So, where are we now? Peel Hunt’s latest IPO Speedometer, a regular gauge of UK market health, puts conditions at just 22 miles per hour. To translate, that means the market is “selectively open”, deals can get done, but only in the right conditions, and only for the right companies.
The trouble, Peel Hunt says, is not a lack of companies wanting to list. It is about timing. Volatile markets, tariff shocks from Washington, and cautious fund flows have caused most would-be issuers to shift their schedules to the second half of the year.
Why volatility matters
IPOs are, by nature, sensitive to mood. The process itself takes weeks, sometimes months, to prepare. Once launched, shares often trade with limited liquidity, which can exaggerate moves, both up and down.
So when volatility picks up, as it did after President Trump’s tariff announcements, it tends to push deals back.
Investors use volatility indices like the VIX (US) or V2X (Europe) as a barometer. Peel Hunt notes that while IPO-friendly conditions typically coincide with readings below 20%, current levels are still hovering above that. For now, uncertainty is keeping many potential listings on ice.
What has gone right…and wrong
So far this year, European IPOs have outpaced the UK in both volume and size, but even there, performance has been mixed. Peel Hunt points out that only three of the seven major IPOs in Europe are currently trading above their issue price.
In the UK, the pickings have been slimmer. The £96 million listing of accountancy firm MHA in April was a rare bright spot, following a long drought since Applied Nutrition’s £158 million IPO last October.
Peel Hunt says this is not a reflection of weak investor interest in the UK. It is more a question of supply: high-quality European issuers have simply been further ahead in the pipeline.
Importantly, investors are becoming far more selective. Peel Hunt notes that companies with strong domestic demand or anchor investors, those willing to commit capital ahead of the float, are finding it easier to get across the line. Deals that rely on international demand or are priced aggressively are struggling.
What about the US?
The American market has not offered the escape hatch some UK firms were hoping for. While the US has seen larger deals, performance has been poor. Venture Global, which raised $1.75 billion, is now trading 65% below its IPO price.
Even CoreWeave, a much-hyped AI platform, had to cut its deal size and price below range.
Peel Hunt argues the London Stock Exchange has done well to challenge the myth that US IPOs are automatically better for international issuers. A difficult backdrop is a global story, not just a UK one.
What investors should watch
The takeaway for private investors is this: the IPO market is waking up, but it is still on light footing. Most large transactions will now target the post-summer window.
Peel Hunt remains optimistic that the pipeline is in place, especially as UK valuations start to look more compelling compared with the US.
Key themes are already emerging. Expect a growing number of financials, fintechs and corporate spin-offs to feature in the second-half calendar. International issuers are also weighing London, drawn by its relative valuation appeal and improving sentiment.
For now, Peel Hunt says fund managers remain engaged. Meetings with pre-IPO candidates are well attended, and investor appetite for quality companies is very much alive. But sentiment is cautious, and pricing discipline remains key.
Final thought
The IPO process may have lost some of its dazzle in recent years, but it is still an essential part of public markets. For investors, it offers a rare shot at owning businesses on day one. Just be aware: in a market still stuck in second gear, not every offer will be worth chasing.
Peel Hunt’s message is clear. The engine is turning, but the road ahead is still bumpy. Caution, selectivity and timing will determine who makes it to market and who stalls.
