Small company IPOs jump as firms seek growth capital

There were 75 IPOs on the London Stock Exchange’s AIM market last year. These were worth a total of £2.5bn – an increase in value of 134 per cent on 2013.

Wholesale and retail was the most active sector in the market, contributing 41 per cent to the overall value of transactions, followed by manufacturing (34 per cent) and the information and communication sector (24 per cent), according to data from information services company Experian. 

Finance and insurance services was the third most-active sector on London’s junior market in 2013, contributing 30 per cent of the value, but it only ranked in fifth place last year, accounting for 12 per cent of the total transaction value.

“The growing number of IPOs on the AIM suggests smaller businesses are increasingly considering listing as an option to secure the funding they need to take their company to the next level,” said Wendy Driver, business development manager at Experian UK&I. 

“Business owners may be curious about what their company could be floated for and should look back at IPOs of companies similar in size and sector in previous years to decide whether it’s an option they wish to explore further.”

Main LSE market

The volume and value of IPOs on the LSE’s main market also increased last year. 

The number of IPOs went up by 43 per cent, from 40 to 57, while the total value rose to £12bn, up 12 per cent on the £10.6bn recorded in 2013. This was the highest level of volume and value recorded on London’s main market since 2007. 

Large IPOs worth more than £100m dominated the main market, and private equity investors were involved in 20 of the large transactions, accounting for £7bn of the total.

Financial and insurance services was the most active sector on the London Stock Exchange last year, raising £5.5bn through 39 deals, followed by the wholesale and retail sector, which completed 32 transactions worth £5.5bn combined, while the information and communication sector completed 27 transactions worth £3.3bn.

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