It’s fair to say that 2021 was an extremely busy one for the UK initial public offering (IPO) market, with 118 companies listing on the London Stock Exchange (LSE). This is more than triple the total number in 2020. But what’s in store for 2022? What are the top IPO opportunities to look out for this year as an investor?
Here is what you need to know.
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Will the UK IPO scene reach 2021 levels in 2022?
We will have to wait and see whether 2022 emulates 2021’s levels, but Susanna Streeter, senior investment analyst at Hargreaves Lansdown, thinks that it’s highly unlikely.
In a report published by the Evening Standard, she says: “Although the IPO pipeline for 2022 is reasonably strong, 2021 will be a hard act to follow. Appetite is likely to depend on the easing of Covid restrictions and the ongoing global economic recovery.“
That said, new stock market listing rules have recently been implemented by the Financial Conduct Authority.
The new rules are aimed at making London a more appealing option for listings, particularly for tech companies. They could help keep the IPO scene busy in 2022, just as in 2021. But as things stand, we’ll have to wait and see.
What are the top IPOs to watch out for in 2022?
If you are searching for new investing opportunities this year, then here are five rumoured IPOs that are worth keeping an eye out for.
1. Virgin Atlantic
Sir Richard Branson’s Virgin Atlantic had its sights set on a 2021 IPO. It was forced to delay its plans due to the impact of the pandemic, including disruptions to its transatlantic flight routes.
Despite the Omicron variant raising further concerns about long-haul flights, hopes that this could be the final phase of the pandemic means that the company’s IPO plans could be given the go ahead in 2022, according to Hargreaves Lansdown.
2. Monzo
Monzo is a UK online bank with a customer base of over five million. The company’s valuation has recently surged after winning new customers and securing around £377 million in a funding round in December 2021.
An IPO in 2022 could be the next logical step in its pursuit of growth and expansion.
3. Burger King UK
Private equity firm Bridgepoint Group, which owns the exclusive rights to the Burger King brand in the UK, is said to be readying a £600 million float of the company on the LSE.
The exact timing of the IPO has not been finalised. However, it is widely expected to happen in the first half of this year.
4. BrewDog
BrewDog, the UK craft beer brand, was originally planning to go public in 2020, but it had to put the brakes on its plans due to unfavourable market conditions.
It seems that 2022 could be the year the company finally comes to the public market. However, there is a possibility that it could delay its listing until as late as 2023, according to some sources.
5. Starling Bank
This UK-based digital-only bank was founded in 2014 and has seen impressive growth since then. The company is planning to expand its current product and service portfolio as well as enter the European market. The proceeds from an IPO in 2022 could be extremely beneficial to both causes.
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How can you invest in these IPOs?
It should be noted that there is no guarantee that these companies will go public in 2022.
IPOs can be fairly complicated with a lot of moving pieces. It is not uncommon for companies to postpone their IPO plans on the spur of the moment.
That said, as an investor, it pays to be well-prepared to capitalise if and when a promising IPO opportunity arises.
The best way to do this is by opening a share dealing account with a reputable broker. This way, you’ll be able to snag the stocks of these companies on the day they go public.
Here in the UK, we are also lucky to have the option of investing in companies’ stocks through a stocks and shares ISA. This is a government-approved tax wrapper that can shield your investment gains from tax.
Finally, remember that investing is inherently risky. Don’t forget to do your due diligence before you put your money into any investment, and seek professional advice if necessary.
