A comprehensive proposal is being drafted by key personnel from Euronext Dublin and other significant players in the Irish capital markets. They seek to re-ignite the IPO market, which has been stagnant in recent years, according to insider sources. These experts, amounting to roughly 20, are from various sectors such as stockbroking, corporate law, and financial PR and are divided into three teams to implement the main suggestions from the 2023 report, with Euronext Dublin leading the charge.
The afore-mentioned report, courtesy of Grant Thornton, advised on creating a “cornerstone fund”, tax seductions for retail investors investing in public companies and similar benefits for company founders or owners joining the market. However, this report faced opposition due to its lack of detailed propositions.
Recent years have witnessed a dearth of new companies on the Iseq 20, an acceleration aggravated by the exits of prominent companies CRH and Flutter Entertainment, and an impending departure of Smurfit Kappa, a notable player.
In the preceding five years, merely three enterprises have made their debut on the Dublin market – health group Uniphar, renewable energy storage firm Corre Energy, and medtech company HealthBeacon. The latter was delisted last month following financial struggles.
An insider source revealed growing recognition that the sluggish IPO market is a predicament facing not just Euronext but Ireland as a whole.
The Irish Equity Market Forum group plans to present comprehensive recommendations to both the Finance and Enterprise, Trade and Employment departments before the end of April. These measures aim to facilitate an early entry into the last budget cycle preceding a planned general election.
With the recent era of ultra-low interest rates, many potential IPO candidates have been lured towards venture capital, private equity, and trade sales over the past decade. Dublin, in particular, has been hit by the global trend of a decreasing number of investable public companies, known as “de-equitisation”.
A report by Grant Thornton has raised concerns about the decline of the Irish stock market, which has historically driven international growth for companies such as CRH, Ryanair, and Kerry. The study highlights the need for action to ensure that the domestic equity market continues to provide a viable source of funding for Irish businesses and remains a commercially attractive prospect for market participants. A local exchange is seen as fundamental to supporting local business ventures.
Companies listed on the Euronext Dublin, also known as the Irish Stock Exchange, added €12.4 billion to the Irish economy in 2022, per the findings of the Grant Thornton study. These Dublin-listed corporations employed nearly 47,000 people throughout Ireland, directly paying out wages amounting to €6.7 billion in the same year. Moreover, these businesses are reported to indirectly support an additional 40,000 jobs.
However, the daily trading value of shares on Euronext Dublin, the operator of the Irish stock market, experienced a 30% drop in February, having lost significant players such as CRH and Flutter Entertainment in the five months prior.
Global IPO activity fell by 16% in the previous year to a total of 1,429 deals, amidst economic uncertainty and rising interest rates, based on the latest data from S&P Global Market Intelligence. This figure showcases a 40% decrease from a 2021 record, a year in which Dublin saw merely two IPOs.
Stay updated by subscribing to Business push alerts and receive the finest news, expert analysis, and commentary straight to your phone. Keep current with The Irish Times via WhatsApp and tune in to our weekly Inside Business podcast for the latest episode.