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While not a flood following a dry spell, yet the climate changed for stock market listings in the UK capital during the past year. The first half was exceptionally dry as geopolitical tensions disrupted markets: IPO proceeds reached a nadir in a miserable run beginning 2022. But statistics reveal a notable pick-up in activity in the latter six months, though still far short the heights of the previous peak.

A Welcome Development for the LSE and Rachel Reeves

The modest recovery offers some reassurance for each of the UK's main market and Chancellor Rachel Reeves. For the LSE, the lack of new listings – rather than fundraisings by existing companies – has proved problematic in the past few years, particularly after the UK missed out on the high-profile listing of chip designer Arm Holdings in 2023. Concurrently, the chancellor is promoting the benefits of long-term equity investment, a endeavor that is easier when there is a regular stream of market entrants.

Recent Listings

Not all of last year's listings are household names. The most significant debut was US data centre real estate group Fermi – and that was a simultaneous listing with the American tech market. More familiar UK names included the £1.2bn tinned tuna maker Princes Group, which raised £400m, and the specialist lender Shawbrook.

"The activity this year is very much a sign of future trends, with numerous firms gearing up for a listing in London in 2026," states exchange CEO Julia Hoggett.

She is probably correct. Stock markets are high, which motivates owners to cash in. Additionally, the merry-go-round of private equity funds trading portfolio companies may have peaked; the stock market, the original exit route, looks like a better option.

Prospects for Next Year

A major potential listing of the coming year could be Oslo-based Visma, one of the continent's largest tech firms, with thousands of employees. The LSE must still be chosen – Sweden's market has emerged as a rival – but financial advisors are in place. Visma, backed by British private equity firm Hg Capital, is valued at at least €20bn, easily sufficient to qualify for the FTSE 100.

Additional candidates include:

• UK veterinary group IVC Evidensia, whose route is clearer following a competition watchdog review. It operates 2,700 sites in 19 countries.
• The RAC roadside recovery business (and potentially the AA too).
• The combined Waterstones and Barnes & Noble bookshop chains.
• Fintech payments platform Ebury and online travel agent Loveholidays.

A market downturn would probably stall progress, but the schedule of flotations appears healthier than it has in a long time. "We have seen assurance slowly return with companies considering listing, who have been encouraged by the activity," observes Brian Hanratty of investment firm Peel Hunt.

Headwinds Persist

Yet London still requires an influx of new blood. During the mini-pick-up, payments firm Wise disclosed a switch of its main market quote to the US. At the same time, the ongoing attrition from takeovers and delistings continued to reduce the total of listed firms; by the close of autumn, there were fewer than a thousand companies with a premium quote in London, down from 972 at the start of the year.

In her November budget, the chancellor unveiled a temporary tax break for new listings. This limited relief on the tax on share purchases is likely a secondary factor for issuers and investors. But, it would prove advantageous if the IPO market comes to life at the same time. A sustained recovery is overdue – and has to be more than longer than six months.