Is London’s IPO market set to liven up?
Speculation about a stamp duty holiday might help revive IPO activity in the UK, with signs of life already visible. City writer Graeme Evans looks at prospects for new issues here.
2nd October 2025 14:04
by Graeme Evans from interactive investor
The debut of a data centre developer and possibility of a £2 billion float by lender Shawbrook today boosted hopes of an IPO upturn to fill the gap left by mid-cap takeovers.
The UK currently stands 23rd in Bloomberg’s global rankings for initial public offerings (IPO), with just £184 million raised by new issues in the first nine months of the year.
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City bank Peel Hunt said today that the IPO market was “exceptionally quiet” but that it expects a gradual improvement over the rest of this year before a stronger pick-up in 2026.
Tomorrow sees the start of conditional dealings in Cheshire-based Beauty Tech Group, which is targeting a valuation of between £280 million and £320 million.
The main market offer by the provider of home-use beauty technology products aims to raise primary capital of about £29 million, which would ensure a debt-free position.
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Today’s session also saw the London debut of Texas-based Fermi, which is planning one of the world’s largest data centre complexes powered by nuclear, natural gas, solar and batteries.
The dual-listed stock, which was only founded in January, has risen sharply to $36 after listing at a price of $21 in New York yesterday. It expects to raise $681 million from the move.
On Shawbrook, the Financial Times reported today that private equity owner Pollen Capital is planning an intention to float announcement as soon as next week.
The specialist lender recently announced 35% growth in half-year underlying profit to £168.6 million and an adjusted underlying return on tangible equity of 18.3%.
An uplift in IPO activity is desperately needed to refill the hopper after 35 offers for mid-cap companies equating to 13% of the FTSE 250 index since the start of 2024.
Bid activity so far this year has included deals for Dowlais Group (LSE:DWL), Spectris (LSE:SXS) and Deliveroo (LSE:ROO), with the valuation of all transactions amounting to £33 billion.
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There has yet to be an offer for a FTSE 100 company in 2025, with 16 in the FTSE 250, eight in the FTSE SmallCap and 10 on AIM. Peel Hunt said the average bid premium stood at 40% versus the undisturbed price, a level above the historic norm.
The bank today repeated its calls for pension and ISA reform to stem the continued outflows of UK capital.
It said: “There has been a clear focus from government on increasing investment in UK private markets – we now need to address public markets to ensure that our growth companies do not sell out too early or list overseas.”
One option reportedly under review by Chancellor Rachel Reeves is a stamp duty holiday for IPOs. According to the FT, the planned exemption is expected to apply for a period of two to three years rather than just the day of the IPO.
Peel Hunt also called for a UK-focused fund to provide capital for private companies as they scale, a role it believes could be undertaken by the British Business Bank.
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