Nearly 600 IPOs rolled out globally in the second quarter, dominated by traditional listings while SPAC activity cooled, says EY

Nearly 600 IPOs rolled out globally in the second quarter, dominated by traditional listings while SPAC activity cooled, says EY
Didi Global shares went public in the US in June. Xin Yue/ via Getty Images
  • 597 IPOs came online in the second quarter of 2021, the busiest quarter for that market in 20 years, said EY.
  • There were 59 SPAC IPOs during the period, a slowdown from 299 during the first quarter.
  • But SPAC activity is poised to pick up again in the second half of 2021.

The second quarter of 2021 marked the most active for companies entering the public markets worldwide in more than two decades, with traditional IPOs leading the way while the market for SPACs slowed in the US, according to figures from consulting firm EY.

Didi Global as the biggest IPO by proceeds between April and June as the China-based ride-hailing service pulled in $4.4 billion as it launched on Nasdaq. Didi was one of the 597 IPOs that went live last quarter, and among the companies that went through a traditional IPO process. Such firms had the most IPOs, outstripping SPACs, or special purpose acquisition companies, the market for which boomed earlier this year and in 2020.

SPACs are so-called "blank check" firms that go public with only cash on their balance sheet. Their aim is to merge with or acquire a private company, allowing that business to skip the traditional IPO process to debut.

EY said there were 59 SPAC IPOs in the US that raised $12 billion in proceeds in the second quarter, a cooldown from the first quarter when there were 299 SPAC IPOs that raised $96.9 billion.

SPAC formation slowed in the second quarter in part on accounting guidance from the US Securities and Exchange Commission for SPAC-related companies, said EY.


"The guidance indicated that in some cases, SPACs should account for the warrants as liabilities rather than as equity. As a result, many SPACs had to restate their financial statements, a process that should have been completed by June," the consultancy said in its report.

But activity in the SPAC IPO space should pick up in the third quarter, with nearly 300 SPACs on file that haven't yet priced, indicating there are SPACs rushing to find suitable targets, said EY. "High-quality target companies could have stronger bargaining power that will enable them to secure more favorable terms," it said.

Overall, the IPO market has been buoyed by 'ample" liquidity in the financial systems stemming partly from ongoing government stimulus programs, as well as by a surge in equity markets and speculative and opportunistic transactions, EY said.