The importance of the first step

There is a positive climate for reactivating IPOs in 2024. The market has been closed for months, there are good equity stories in the pipeline and investors have the attitude and intention to analyze them and participate at the right price. A certain concern is already being detected to ensure the first operations succeed and serve as a stimulus for others.

Signs in the first half all point towards operations involving larger companies. Of the many candidates talked about in recent months, it is foreseeable that those that crystallize will be in the mid and large cap range. Any small company that tries to enter at this point will have a hard time. Investors pay close attention to liquidity, which requires operations of over 300 million euros.

So far, much expectation has focused on candidates who have already activated the process, with a set calendar and advisors hired. The impression is that every detail is being taken care of, with the conviction that to take the (first) step you have to get everything right.

Once windows of opportunity are identified, it remains to be seen how many companies will be able to take advantage of them. It is very likely that the rhythm of these operations will depend, among other things, on IPO performance in the United States. If these are successful, no one doubts this would have a ripple effect throughout Europe, including Iberia, with a certain delay. The outcome for those who take the step in the first semester will help define the pace of operations in the second.

Another perhaps important question is knowing the appetite of American investors. They have been missing in Spain for seven years. The euro-dollar exchange rate was not ideal, and business opportunities on this side of the Atlantic were limited.

Until now, European demand has been sufficient to take these operations forward, with significant participation from local investors. It remains to be seen if the trend continues or if American investors begin to take positions. The presence as advisors of the main American banks in active operations could confirm this hypothesis.

To sum up, and with the macro-economic uncertainty that has stifled the market in recent months now cleared up, it seems that the real key to setting the pace of operations will be the discount on ideal valuations that each candidate is willing to accept. There is always a button to go forward or stop. We will see in the coming months how many are encouraged to press it and look ahead to ringing the bell.

Mara Nantón.
Executive Director and Head of ECM at JB Capital