Only £3m was raised in IPOs on London’s Alternative Investment Market in the third quarter of 2022 versus £468m in the same period last year – the lowest since the height of the last recession in 2009.
Only one company floated on the junior stock market in the last three months, raising just £3m in new equity.
Many companies have had to shelve plans to list on AIM until volatility in the stock and bond markets reduces.
A period of market turmoil is a very difficult time to deliver a successful IPO. Companies that were gearing up for floats on AIM have been forced to hold off until the current volatility subsides.
At least two AIM IPOs that were confirmed as flotations for September have been paused. The same will have happened to plenty more floats that were further back in the pipeline.
If you are going to delay an IPO its best to do it early on in the marketing or before the marketing is done.
While IPOs have fallen sharply in recent months, AIM is unlikely to see the same degree of disruption in the coming recession as it did during the 2008/9 recession.
AIM saw 95 companies leave the market due to financial stress and insolvency during 2009 alone. In comparison, in the 18 months following the beginning of Covid disruption at the start of 2020, just 11 companies left AIM for that reason.
AIM is a very different market now than it was at the start of the last recession. 2008 and 2009 saw a lot of the market’s weaker companies leave.
A concerted effort by the London Stock Exchange to improve the quality of governance on the market over the last decade. That, coupled with a stronger, more diverse selection of industries represented on the market, has meant that AIM companies are now better able to weather storms.