Proceeds from US IPOs could reach a four-year high next year, driven by improved market conditions
The US market for initial public offerings (IPOs) is expected to gain significant momentum next year, potentially reaching its highest level in four years, according to senior bankers at BMO Capital Markets.
In a report by BNN Bloomberg, they predict proceeds from first-time share sales in the US could range between US$40bn and US$50bn.
This marks a projected increase of at least 32 percent from this year’s figures, which only include companies raising more than US$20m, excluding blank check firms. This would also be the highest since the pandemic-fueled IPO boom in 2021, according to Bloomberg data.
BMO’s co-head of global equity capital markets, Eric Benedict, stated, “We’re entering a pretty unique period of time,” in an interview at BMO’s New York office. He was accompanied by Warren Estey, head of investment banking.
Benedict anticipates, “In the first quarter, you’re going to start to see an acceleration of issuance, and that should happen through at least the first half of 2026.”
However, he warned the market would remain divided between “haves and have nots,” with only companies showing strong growth and solid industry positioning likely to succeed in going public, while others could face challenges.
Global IPO activity has been subdued for nearly three years, with US markets only recently beginning to rebound. This recovery comes as the Federal Reserve’s shift to cutting interest rates sparks greater risk appetite.
Larger deals, especially involving well-established companies, have outperformed smaller offerings in the market.
As of October 22, the 18 companies that raised over US$500m on US exchanges have seen their stocks rise collectively by 38 percent, as shown by Bloomberg data.
In contrast, companies raising between US$100m and US$500m have seen a lower, though still positive, increase of 17 percent.
“Bigger deals typically are harder to get done because you need to raise more money, but we’re sort of seeing the opposite and it’s quite healthy,” Benedict remarked.
Attention is now focused on Ingram Micro Holding Corp.’s return to the public market. The technology company and its owner, Platinum Equity, are expected to raise up to US$427.8m through an IPO, with pricing expected on Wednesday evening.
Estey highlighted that improving market conditions are boosting the appetite for IPOs. He noted that for some private equity holdings, especially larger ones that may not have a suitable buyer, an IPO could be the only viable exit option.
He also pointed out that expectations of continued interest rate cuts by the Federal Reserve will likely drive a further increase in IPO activity across banking sectors.
BMO’s outlook for next year is aligned with pre-pandemic IPO averages, which hovered around US$56bn annually, based on data from Bloomberg excluding smaller offerings.
“We do see markets kind of returning to those ten-year averages and coming out of troughs, and that’s kind of product by product,” Estey explained.
