IPOs: Off to a Poor Start as 2023 Kicks Off

A mere 15 offerings have been filed thus far, fewer than in previous years.

If the old saw is true that January determines how the investing year will fare, 2023 doesn’t look good for initial public offerings. The count thus far this year is just 15 offerings filed, down almost a third versus this point in 2022 (20 launched then), according to Renaissance Capital.

This is not good news for private equity firms seeking exit opportunities for their portfolio companies—and by extension, for the asset allocators who have chosen PE as a prime holding. Last year was pretty lousy for IPOs, with 71 filers raising almost $8 billion. Compare that with record-setting 2021, when the stock market was on fire: 397 offerings and $142 billion garnered, per Renaissance.

Not a single IPO last year raised $1 billion, a trend that carries over to 2023, FactSet figures show. The largest offering in 2022 was Intel’s spinoff of MobilEye, a self-driving car business, which bagged just less than $1 billion. 

This year, the biggest IPO in the pipeline is TXO Energy Partners LP, an oil and gas producer, which aims to get $100 million when it goes public on Friday, Morningstar researchers say. The next by size is QuantaSing Group Limited, which holds China’s largest adult online learning service provider; it aims to sell for $41 million. The rest are below $13 million. These are all included in the 15 filings, year to date.

Forecasts of a possible recession this year are not helping public offerings. What could turn things around? A stock market increase, for a change. At this early stage, the S&P 500 is up 4.6% in 2023, after a tiny dip Tuesday. The index lost 19% in 2022.

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