After a record-breaking 2021, the global IPO market took a sharp turn in the opposite direction in 2022. With only 1,333 IPOs raising US$179.5b, IPO activity dipped 45% and 61% by number of deals and proceeds, respectively, year-over-year (YOY). As the average deal size shrank due to lowered valuation and poor stock market performance, we didn't see as many large IPOs launch in 2022. These and other findings were published today in the EY Global IPO Trends 2022.

Throughout 2022, global IPO activity was impacted by increased market volatility and other unfavorable market conditions, along with the dismal performance of many IPOs that were listed since 2021. Amid an environment defined by higher inflation and rising interest rates, investors have spurned new public companies and turned to less risky asset classes. Similarly, financial-sponsored IPO activity took a steep fall of 77% and 93% by number and proceeds, respectively. Most special purpose acquisition companies (SPACs) listed from late 2020 are also reaching their two-year window, and they must now either find a target to merge or return the IPO proceeds to their investors. While these numbers represent a stark decline from 2021, global IPO deals still turned up a 16% increase by number when compared to pre-pandemic 2019.

Despite the fact that market activity was mostly down across the board, there were a few select industries and regions that did achieve modest success. The technology sector continued to lead by volume accounting for 23% of deals, while the energy sector dominated by proceeds, accounting for 22% in 2022. Among listed mega IPOs, which are defined as those that raised proceeds of more than US$1b, the average proceeds in 2022 are 45% higher than those in 2021, on the back of strong valuation for the mega energy IPOs that took place this year.  Certain markets such as Mainland China, Middle East and some ASEAN countries have performed relatively well despite the significant global underperformance.