IPO Round Up of First Half of 2023
There is renewed optimism in the initial public offering (IPO) market. Normally, IPO activity gains momentum in the second quarter and peaks in June. This year has also not been an exception to the trend.
In June alone, IPO issuance touched $30 billion, breezing past the $19 billion issued in June 2022. There have been 89 IPOs filed (up 15.6% year over year) and 46 IPOs priced this year (up 21.1% from the year-ago period), as of Jun 25, 2023, per Renaissance Capital.
Total proceeds raised were $7.6 billion this year, up 91.3% from last year. The industrials sector has ruled the space with 60 IPOs, the highest in any sector. The successful debut of the Mediterranean restaurant chain Cava and other high-profile IPOs point toward investor appetite for risk-on exposure.
How Has Global IPO Market Fared in 1H of 2023?
The U.S. IPO ETF has rebounded this year on positive risk-on sentiments. Chances of slower Fed rate hikes have made this possible. Renaissance IPO ETF IPO is up 25.8% this year, while Renaissance International IPO ETF (IPOS) has lost about 12%. The S&P 500 is up about 16% this year.
Global IPO volumes dropped 5%, with proceeds down by 36% year over year, per EY. The United States had its largest offering since November 2021. Asia-Pacific continues to steal the show with approximately 60% share. Of the top 10 global IPOs, half were from China and one was from Japan. On the other hand, EMEIA IPO activity continued to fall.
What Lies Ahead?
Renaissance Capital expected at the start of 2023 that IPO activity should normalize in mid-2023 as companies in the pipeline are awaiting a favorable business condition. Meanwhile, EY expects a recovery in the situation in late 2023. The sudden banking crisis may cause the recovery later than expected.
However, renewed rate hike worries could be a drag on the IPO market. We believe that if the Fed enacts two rate hikes, each worth 25 bps, and stays put in the following few meetings, we can see a healthy U.S. IPO market in 2024.
What Won; What Lost in 1H?
Winners
The top five IPOs of 1H 2023 are as follows (as of Jun 30, 2023):
Genelux Corporation (GNLX), which went public on Jan 26, 2023, at $6.00 per share and has since increased to $32.72, representing a return of 445.33%.
Structure Therapeutics Inc. (GPCR), which hit the market on Feb 3, 2023, at $15.00 per share and has since increased to $41.57, representing a return of 177.12%.
Shengfeng Development Limited SFWL, which went public on Mar 31, 2023, at $4.00 per share and has since increased to $9.17, representing a return of 129.25%.
CAVA Group Inc. (CAVA), which went public on Jun 15, 2023, at $22.00 per share and has since increased to $40.95, representing a return of 86.14%.
Skyward Specialty Insurance Group (SKWD), which debuted on Jan 13, 2023, at $15.00 per share and has since increased to $25.40, representing a return of 69.33%.
Losers
The five worst-performing IPOs of 1H 2023 are as follows (as of Jun 30, 2023):
The NFT Gaming Company, Inc. (NFTG), which went public on Feb 15, 2023, at $4.15 per share and has since declined to $0.69, representing a decline of 83.31%.
Wang & Lee Group Inc. WLGS, which hit the market on Apr 20, 2023, at $5.00 per share and has since fallen to $1.36, representing a decline of 72.80%.
Lucy Scientific Discovery Inc. LSDI, which hit the market on Feb 9, 2023, at $4.00 per share and has since fallen to $1.15, representing a decline of 71.25%.
Cadrenal Therapeutics, Inc. CVKD, which went public on Jan 20, 2023, at $5.00 per share and has since declined to $1.51, representing a decline of 69.80%.
Lichen China Limited LICN, which went public on Feb 6, 2023, at $4.00 per share and has since dropped to $1.32, representing a decline of 67.00%.
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Renaissance IPO ETF (IPO): ETF Research Reports
Lichen China Limited (LICN): Free Stock Analysis Report
Skyward Specialty Insurance Group, Inc. (SKWD) : Free Stock Analysis Report
Genelux Corporation (GNLX) : Free Stock Analysis Report
Cadrenal Therapeutics, Inc. (CVKD): Free Stock Analysis Report
Structure Therapeutics Inc. Sponsored ADR (GPCR) : Free Stock Analysis Report
Lucy Scientific Discovery Inc. (LSDI): Free Stock Analysis Report
The NFT Gaming Company, Inc. (NFTG): Free Stock Analysis Report
Shengfeng Development Limited (SFWL): Free Stock Analysis Report
WANG & LEE GROUP, Inc. (WLGS): Free Stock Analysis Report
CAVA Group, Inc. (CAVA): Free Stock Analysis Report
