Charging ahead: EMEA EV IPO candidates need to get their story straight

ECM Explorer 13 April

Charging ahead: EMEA EV IPO candidates need to get their story straight

Electric vehicles are becoming an increasingly hot topic in European ECM, with several IPO candidates preparing to test investor appetite, but a large cohort of deals means issuers will have to differentiate themselves from the crowd.

The EV market has been steadily growing in Europe with a few companies listing in 2021, the busiest year for the market.

Automakers are churning out electric vehicles and large operators are deploying electric charging stations across European cities to cater to the growing customer base. Fast-growing start-ups are also equipping streets with electric scooters to persuade them to ditch their cars.

Renault [EPA:RNO], the France-based car manufacturer, and Lotus Tech, an affiliate of Hong Kong-listed automobile company Geely [HKG:0175], are both planning to list electric vehicles units in the near future previous reports said.
“It fits into the boom in green energy and renewables. The performance of those stocks are strong, and investors have been buying more into that story,” an ECM banker told this news service.

ABB [SWX:ABBN], the Swiss industrial company, is aiming to list its E-mobility business in the second quarter of this year, as previously reported. It is one of the long-awaited IPOs in the European market after a challenging first quarter.
The problem is that many of these companies are listing under the EV banner rather than laying out the strength of their specific businesses.

“Commercial trucks and electric scooters can’t be in the same group but somehow issuers are making it fit,” a sector consultant said. “Once the market growth stabilises, these different operators will need to be broken down into clear categories, just as you see in the normal automotive industry.”

Italian Enel [BIT:ENEL], is in the process of appointing a syndicate for the listing of its electric vehicle operations, Enel X Way, which could make its public markets debut early next year, three sources told this news service.
One source said that the company, assisted by Bank of America, is in the middle of a reorganisation process to better understand which assets should be put into a new entity to help differentiate it from other IPO candidates and to have a clearly defined equity story.

It is a smart idea, advisors say, adding that the sectors could do with a clear breakdown in categories so companies can differentiate themselves from one another.

“It is not a tough sell but you need to present yourself well,” added an ECM banker. “I’d say be cautious and make sure you have picked the right corner of the market and you have your story right.”

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