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Renaissance Capital's May IPO Market Update

June 3, 2024

Ten IPOs raised a combined $995 million in May, trailing the 10-year historical average (16 IPOs, $4.9B). May IPO activity declined from last month, which is not unusual based on historical trends, though in this case likely due to market turbulence in April. We still expect to see a gradual pickup in activity through the summer. Four issuers raised $100 million or more, representing a diverse mix of businesses that spanned Chinese EVs (ZK), US auto logistics (PAL), insurance (BOW), and software (SVCO). The month's IPOs averaged a 46% return from offer, boosted mainly by a couple high-flying micro-caps. The four sizable deals averaged a solid 19% return, driven by strong first-day trading (+19%) that deflated slightly in the aftermarket (-1%). After stumbling in April, the Renaissance IPO Index recovered some of its losses in May, rising 5% to narrowly outpace the S&P 500. New filing activity held a relatively brisk pace with eight sizable filers, including health-tech firm Tempus AI and aluminum recycler Novelis. Three blank check IPOs priced in May, and seven submitted initial filings, with more experienced sponsors returning to the SPAC market. There were six SPAC merger announcements and four completions. As we head into the summer, the IPO market is showing signs of warming. The June calendar is starting to fill out, and movement in the private backlog should translate to more filings and stronger deal flow in the coming months. Almost mid-way through the year, 2024 shows a strong increase in IPO proceeds (+94% y/y) and $100mm+ deals (+133%) from 2023, while still falling short of the 15-year average.

Monthly US IPO Activity
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