A record-breaking IPO deluge could be coming this autumn

Equities
Investments

The latest reports suggest that autumn 2021 will be the busiest period for IPO launches to date.

IPO launches

Potentially hundreds of new public offerings are on their way

2021 has already seen the highest number of initial public offerings since the 2000 dot-com boom. It could be about to see more as we transition into autumn.

CNBC reports that up to 110 companies will go public across the next 3-4 months. That would bring the total number of deals up to 375 – valued at a cool $125bn in fundraising.

In the pipeline, we see a mixture of companies but a significant number of FMCG and food firms are on the radar.

Grocery business Fresh Market, deliver service Instacart, and Greek yoghurt producers Chobani are in the process of making their initial filings. Adding to the list of food-related businesses prepping their IPOs are casual salad restaurant chain Sweetgreen and Impossible Foods, a manufacturer of plant-based meat alternatives.

A number of fashion firms are involved too. Warby Parker, the prescription eyewear business, will likely be going live with a direct listing in the coming months. Authentic Brands, which owns the Nautica and Eddie-Bauer brands, has been eyeballed as about to go public, alongside Indian e-commerce retailer Flipkart and sustainable footwear brand Allbirds.

Digital payment processor Toast and mobile payments processor Stripe represent some of the tech stocks possibly launching IPOs.

They may be joined by several cryptocurrency filings. We’ve already seen Coinbase, the US largest crypto exchange, go public, and there are indicators other digital currency businesses will join them. Sustainable crypto mining firm Stronghold Digital Mining is one such company.

Others to watch include EV builder Rivian Automotive, global asset manager TPG and Republic Airways.

In terms of direct listings, the only one mentioned so far is Warby Parker.

What about SPACs?

It’s thought that SPACs – special-purpose acquisition companies – may have a tougher time raising capital for initial offers in the second half of 2021. Greater scrutiny from regulators like the SEC and a drop off in investor returns from SPACs may contribute to this.

The first half of the year, however, was a SPAC bonanza. 310 such offerings were launched then, generating $70bn in funds. A further 410-blank cheque companies smashed records too when they raised $109bn in the same period.

Will investors make returns?

It’s hard to say at this stage. After market performance has generally been negative across 2021 so far. Some much-anticipated tech stocks, like Coinbase or Robinhood, underperformed after going public for a myriad of reasons. In the case of Robinhood, its links to the volatile cryptocurrency market has caused several fluctuations in the share price.

Pricing IPOs towards the lower end may help sustain growth going forward. Some IPO-tracking ETFs, such as the Renaissance Capital IPO ETF, were flat towards the end of H1 2021, but have subsequently gained traction in July and August. Public offerings since then have been had lower pricings, which may have fed into heightened investor interest.

With the rumoured number of new IPOs, however, it may be worth prepping your trading calendar now. Be sure to stay tuned to Markets.com for further initial public offering updates.