City broker says London IPO market showing signs of revival after prolonged drought

Peel Hunt, a City broker, said the London IPO market was beginning to revive after a prolonged slump, with a growing pipeline of firms preparing to test public markets and some "jumbo issuers" monitoring windows for 2026.

The broker's analysts said the UK market environment had become "increasingly supportive" for fresh initial public offerings as the FTSE 100 hit record highs and trade-tariff-induced volatility eased. Peel Hunt said IPO activity had restarted after the summer and was expected to pick up in the coming weeks.

Peel Hunt noted the pipeline included "numerous candidates, both in the UK and Europe" that were "monitoring near-term windows" and undertaking de‑risking processes with investors before committing to listings. The broker said the near-term pipeline was likely to be dominated by mid-cap companies with market capitalisations between £1 billion and £5 billion, but added that several larger issuers were waiting for suitable conditions to list in 2026.

London's public markets have lagged rivals. The exchange recorded nine new listings in the first half of the year, raising £182.8 million. By comparison, analysis by law firm White & Case showed eight listings in the first half of the previous year generated £526.7 million and nine in the second half raised £258 million. Several European markets have seen activity, including planned listings by SMG in Zurich and NOBA Bank in Stockholm, while the $1.37 billion US listing of Klarna produced a first-day share price jump of about 30 percent.

Market participants said a long period of weak IPO performance since 2021 — when a flurry of new issuances largely disappointed — had pushed many potential UK issuers to consider US exchanges, where they could secure higher valuations and deeper liquidity. Peel Hunt said a sequence of successful UK IPOs would be important to build confidence and encourage more companies to list in London.

Beauty Tech Group's announcement this week that it intended to list in London was cited by Peel Hunt as a sign of renewed interest in the domestic market. The broker added that seeing some IPOs "come to market and trade successfully" would be a crucial test for the broader pipeline.

Investment banks and brokers have been engaging with prospective issuers on timing and pricing while issuers run de‑risking rounds with investors. Peel Hunt said it had been discussing the improving backdrop for some time but acknowledged the market had lacked transaction datapoints to fully prove the recovery.

If more listings proceed and perform well, analysts said that could help reverse a multi-year lull in UK issuance by restoring confidence among issuers and investors. However, the pace and scale of any revival will depend on a string of successful transactions and broader market conditions, including investor appetite for newly public equities.