Optimistic Outlook for Germany's IPO Market

Following the recent initial public offering of a prominent German perfumery chain, market observers predict an increased willingness of similar companies to go public. "The market for IPOs in Germany is thawing," says EY partner Martin Steinbach to the German Press Agency. Provided that market development remains stable, he sees potential for about ten to twelve German company IPOs this year. The auspicious trading debut of the tank supplier Renk at the beginning of the year already marked a positive signal for new market entrants. Four of the ten largest IPOs in Europe in 2023 originated from Germany, including renowned firms such as Birkenstock, Schott Pharma, Thyssenkrupp Nucera, and Ionos, which have already created strong momentum for further IPOs. While the stock market debut of Douglas at the Frankfurt trading venue was rated as arduous due to low initial values and an eleven percent loss in value, Galderma in Switzerland was able to celebrate a successful IPO. According to Julian Schulze De la Cruz, an expert in capital markets law at Noerr, the current economic situation and records at the stock markets could create a fertile environment for a revival of the IPO market, especially from the second quarter onward. In Germany, candidates preparing for a possible initial listing could include the Oldenburgische Landesbank and the intercity bus and rail operator Flix. Meanwhile, investors Bain and Cinven are evaluating an exit from Stada, with sale or IPO considered advanced options. DKV Mobility is also being discussed as a potential IPO contender. IPOs play a rather subordinate role in Germany compared to the USA, where companies like Biontech choose to go public due to the risk-friendly capital market there. However, the comparatively low liquidity at German exchanges could still have a dampening effect on the IPO ambitions of German companies.