After struggling to take off again following COVID-related delays, the initial public offering (IPO) market is returning.
- Three large IPOs from different sectors are scheduled this week, indicating the IPO market is reviving.
- Earlier this month, restaurant chain Cava successfully launched its IPO, raising $318 million, Axios reports.
- Later this week, investors expect offerings from Kodiak Gas Services, Savers Value Village, and Fidelis.
Why it’s news
Last year was one of the most stagnant years for IPOs since 1990, and experts were cautiously optimistic that this year would be better, though expectations were not high. However, Cava’s successful offering and the planned offerings later this week have raised hopes that the market could be recovering.
The three upcoming IPOs are from different industries, letting investors know that it is not just one industry recovering but rather a broader improvement in the market.
Texas natural-gas-compression firm Kodiak Gas Services is looking to raise $328 million at a $1.54-billion market cap. Thrift-store operator Savers Value Village is expecting to raise $300 million with a $2.8-billion market cap. Insurer Fidelis is seeking to raise $298 million with a $2.1 billion market cap. All three companies plan to list on the New York Stock Exchange.
Two other companies filed on Friday—a cosmetics brand Oddity and a biotech firm Sagimet Biosciences. Sagimet canceled its initial IPO last year, Axios reports.
Backing up a bit
Last year, hedge-fund and mutual-fund managers were cautious regarding IPOs. They preferred to buy shares of companies that went public in 2020 and 2021 rather than newer companies that could have unforeseen issues.
Now these managers seem to be interested in new stocks once again. Public equity values have risen, partially giving these investors an incentive to look for new opportunities, Axios reports.
IPOs are still nowhere near their 2021 levels, but there are a few more companies to watch. Reddit may make its long-expected debut, and Instacart is expected to make an offering sometime soon. While the market may not have fully recovered, it has at least made a turn.