A few months ago, French equity capital markets were gearing towards a benchmark IPO in 2H to kick-start the year and brighten the Parisian autumn, but a likely delay of that listing means attention has turned to smaller candidates.
The expected listing of Renault’s [EPA:RNO] EV unit Ampere, dubbed by some as the Porsche [ETR:P911] of 2023, is unlikely to happen until at least 2024, CFO Thierry Pieton declared a few weeks ago.
There is no replacement deal of that size and prestige to boost French IPO volumes, with practitioners now having to rely on mid-cap names.
One ECM advisor lamented the lack of big-name IPOs, which have often driven the narrative in previous years; he added that mid-cap candidates are good for the pipeline, but big fish drive sentiment.
France has had several years of high IPO issuance, but as of late, volumes have been muted, according to Dealogic data.
So far in 2023, French IPOs’ deal value stands only at USD 46.75m, while last year it fell short of reaching the billion-dollar milestone.
In 2021, volumes stood at USD 4.7bn powered by 39 deals. The standout years of the past decade came in 2014 and 2015, when figures reached EUR 6bn and EUR 5bn respectively.
One of the few French IPOs of 2022 was that of green hydrogen producer Lhyfe [EPA:LHYFE] and similar equity stories are populating the pipeline.
ESG IPO issuers including French hydrogen fuelling solutions manufacturer Atawey, biogas producer Evergaz and hydrogen-powered taxi company Hype, could boost volumes and give the autumn a green tinge.
NY-based fragrances and cosmetics manufacturer Coty [NYSE:COTY], is also planning to a listing in its historic home, Paris, though it has not specified timings.
It seems most big deals may be put off until next year.
HSBC head of ECM for France and Southern Europe Jean-Baptise Bureau explained that the market environment remains challenging, so most candidates may wait for early 2024, but the pipeline has increased with many quality issuers.
“We are at least confident to see a strong market in H1 next year,” he said.
Searching for unicorns
But there are questions rising about a lack of tech IPOs in Paris, given a growing number of French unicorns.
“Where are the tech candidates like Contentsquare? Do they feel like they can get a fair deal? Probably not,” the ECM advisor added.
Contentsquare, the French AI-based digital experience analytics firm, has been meeting with investors to test the waters for a potential IPO in early 2024, but it has not yet made statements on the plan, or its timings. The company has also hinted at a US listing in the future, rather than a French IPO.
Another tech unicorn, Doctolib, a French online and mobile platform for booking appointments with doctors and medical specialists, is studying financing options for its next growth milestone, including an IPO, but is still in the early stages of its plans, as reported.
Planisware, the IPO-bound software publisher, has kicked off early investor meetings as it seeks to build interest in a deal after summer, as reported.
In November 2022, President Emmanuel Macron said he wants 10 French tech IPOs by 2025, including two with valuations of more than EUR 5bn.
So far few have risen to the challenge.
Analytics by Raj Sajya
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