IPO bankers are unfazed by the mayhem in the markets
- Bankers who help run initial public offerings aren't sweating the recent market turmoil.
- Though the stock market cratered in recent days and volatility has spiked, senior bankers don't expect equity capital markets to be materially impacted.
- "We expect the IPO markets to remain open to quality issuers around the world," Tyler Dickson, Global Head of Capital Markets Origination at Citi, told Business Insider.
Bankers responsible for running initial public offerings aren't concerned about all the market turmoil and the recent spike in volatility, though they're keeping an eye on the situation.
Despite the Dow Jones Industrial Average suffering its worst sell-off in years - and the largest point-drop for the index on record - and market volatility measures surging to new highs, bankers don't expect much impact on IPOs.
"We expect the IPO markets to remain open to quality issuers around the world," Tyler Dickson, global head of capital markets origination at Citi, told Business Insider. "Naturally, given the recent volatility and sell-off, we are recommending that IPO issuers monitor market developments closely."
After falling nearly 1,800 points on Friday and Monday, the Dow opened Tuesday down 568 points before surging to a gain of more than 500 points by the end of the day. The Cboe Volatility Index- or VIX - spiked 84% on Monday, its biggest single-day increase of all time, according to data going back to 1990.
Most companies planning to list their shares on public exchanges in the near future aren't expected to be materially affected by all the turbulence, though you might see some adjustments on timing, structure, or price for companies that have imminent listings, according to a senior equity capital markets banker who spoke on the condition of anonymity.
"I don't think fundamentally what's happening right now will change these companies," the banker said.
The banker added that business fundamentals remain solid and that people aren't shelving IPO plans for the first or second quarter, but that we might see one or two postponed.
"My view is that this is a healthy technical correction," the banker said. "We're a long way from panic mode."
Neither of the two companies planning the largest IPOs for this week have announced any changes to their plans, nor have they filed any updates with the Securities and Exchange Commission.
Cactus Inc., a provider of oil services equipment, is expected to raise as much as $468 million in its IPO on the New York Stock Exchange Thursday.
Ipsco Tubulars, a manufacturer of oil and gas pipelines and the subsidiary of a company owned by Russian oligarch Dmitry Pumpyansky, is expected to raise as much as $615 million on the NYSE this Friday.