BLOG — Jan 10, 2025
S&P Global Market Intelligence: Building Off a Strong 2024 from the Equities Primary Markets Group
Looking Back – Equity New Issuance Market
Following the global shutdown in March 2020, the equity new issuance market experienced unprecedented volumes, with over 3,300 deals hitting the market from April 2020 through the end of 2021. Banks and issuers adjusted legacy practices and harnessed technology to connect virtually, paving the way to a new, modern world of capital formation. IPO roadshows shrank from 10–14 days to 3–5 days, allowing more deals and capital to hit the market faster while decreasing operational expenses. Additionally, firms sought a quicker, easier path to liquidity, rather than battling arduous requirements, lengthy timelines, and revenue validation required to navigate PE rounds and/or IPO proceedings. The need for corporate capital, paired with continued investor demand for deals—especially retail investors who are excluded from early-stage investment vehicles—fueled the SPAC phenomenon.
Despite the impressive deal volumes, the new issuance market took an abrupt turn in 2022. Financial markets responded to new SPAC regulations, rising inflation, increasing interest rates, and geopolitical tensions, all of which hindered deal flow. Deal volumes plummeted nearly 70% year-over-year to just 622 deals in 2022. Since then, however, the market has steadily increased production year-over-year, growing from 17% in 2023 to 26% in 2024. Overall, 2024 yielded 917 deals that raised $232.2 billion in aggregate proceeds, surpassing the yearly average of 861 deals seen since 2001 (excluding 2020 and 2021). The rise in new issuance, along with the resilience of the S&P 500, NASDAQ, and Dow Jones Industrial Average, demonstrates that investment banks, issuers, and investors are navigating through the complexities of market volatility. This renewed confidence has duly inspired corporate and investor appetite for future financing events.[1]
2024 Deal Volume Analysis
As previously noted, the equity new issuance market saw its second consecutive year-over-year increase in deal volumes, with 917 deals coming to market for $232.2 billion in proceeds. The year began on a high note in Q1, as 246 deals priced for $65.0 billion in total proceeds, a jump of 45% from the 169 deals in Q4 2023 and above the 192 deals in Q1 2023. The market continued to rise throughout the quarter, reaching its apex in March, when 95 offerings priced for $27.4 billion in proceeds. This marked the most active month of March since 101 deals priced in March of 2018. Deal volumes tapered off in Q2, falling 11% from the prior quarter to 220 deals that raised $50.6 billion in proceeds as market volatility rose with uncertainty around Federal Reserve monetary policy. Compared to Q2 the prior year, deal count rose from 202 deals but was just below the Q2 average of 237 deals since 2001.
As the calendar turned to the second half of the year, weaker-than-expected economic data and the impending U.S. Presidential Election negatively weighed on markets. New issuance volumes decreased for a second consecutive quarter, declining 8% from the prior quarter to 202 deals that raised $45.3 billion in proceeds. Toward the end of the quarter, deal activity picked up momentum, with 94 deals in September, setting the stage for what investors hoped would be an active Q4. The final quarter of the year rebounded with 249 deals that raised $71.3 billion in proceeds, including the two largest deals of the year. Furthermore, IPO issuance hit a high point in October with 35 market debuts, the most since January 2022, which also welcomed 35 IPOs.
Follow-On Offerings Led the Way
Dating back to 2001, follow-on offerings have, on average, accounted for 64% of total deal volumes, only falling below the 50% threshold twice—in 2021 (43%) and 2007 (49%). This year, 628 follow-ons priced and raised $154.7 billion in proceeds, marking 68% of the year’s total offerings and continuing the trend observed over most of the past 23 years. Follow-on issuance has risen 20% year-over-year from 524 deals in 2023. Furthermore, total proceeds raised saw a significant jump from the prior year's $98.3 billion, rising 57%, marking the third-largest year-over-year increase, trailing only the increases from 2022 to 2023 (78%) and 2019 to 2020 (76%).
The notable uptick in proceeds can be attributed to the two largest deals of the year from The Boeing Co. and Arthur J. Gallagher & Co. Hailing from the Industrials sector, Boeing raised $18.5 billion in proceeds from its October offering, becoming the third-largest follow-on offering and fifth-largest overall deal dating back to 2001. Meanwhile, Arthur J. Gallagher raised $8.5 billion in proceeds from the Financials sector, the largest deal from the sector since BlackRock, Inc. raised $13.3 billion in May 2020. Another notable follow-on offering from the year came from Kenvue Inc. in the Consumer Goods sector, which raised $3.6 billion in proceeds in May. Rounding out the top five follow-ons of the year, Nasdaq, Inc. from the Financials sector and Diamondback Energy, Inc. from the Energy sector raised $2.7 billion and $2.3 billion in proceeds from their respective offerings.
Looking at the top sectors, three stood out by contributing to 65% of all follow-on offerings, with the Healthcare, Technology, and Industrials sectors pricing 264, 74, and 63 deals, respectively. Unsurprisingly, the Healthcare sector led the way in deal count, a theme that has prevailed since 2011, while the Technology sector has finished second since 2018.
The IPO Comeback
Following the IPO boom in 2021, which was fueled by favorable market conditions and the SPAC phenomenon, the market experienced a sharp downturn in 2022 with IPOs plummeting by 83% to 173 deals. SPAC activity itself fell dramatically by 86%, resulting in only 85 deals compared to the 609 in 2021. Despite increased regulatory scrutiny, SPACs remained a prominent feature of the market, accounting for nearly 50% of the 2022 IPOs. In addition to the regulatory scrutiny, disappointing returns and shifting investor sentiment continued to suppress SPAC volumes in the following years. By 2023, SPACs represented 21% of total IPO issuance, and remained relatively flat at 22% in 2024, still above the yearly average of 15%.
Excluding SPAC issuers, the IPO market still dramatically fell off following the pandemic years, dropping 78% to 89 new issuers in 2022. This marked the worst year for IPO issuance since 2009, which saw 63 IPOs come to market. Since then, IPO issuance has grown year-over-year, rising 34% in 2023 and 49% in 2024. Overall, 2024 welcomed 176 IPOs that raised $32.3 billion in proceeds, above the yearly average of 158 IPOs (excluding 2021).
For the first time since 2012, a new sector surpassed Healthcare for the most IPOs in a calendar year. The surprise sector of the year was Industrials, which had 44 market debuts, well above its yearly average of 14 IPOs since 2001. This included the largest IPO of the year from Lineage, Inc., which raised $5.1 billion in proceeds in July. Lineage marks the biggest IPO from this sector since 2001, topping KPMG Consulting, Inc.’s $2.3 billion offering in 2001. Additionally, from this sector, StandardAero, Inc. and UL Solutions Inc. surpassed the $1.0 billion threshold, raising $1.7 billion and $1.1 billion in proceeds, respectively. Meanwhile, Healthcare saw 43 new issuers come to market for $8.3 billion in proceeds, highlighted by Waystar Holding Corp’s $967.5 million market debut. The Consumer Services sector had the third highest deal count with 24 new issuers coming to market, led by Viking Holdings, LTD’s $1.8 billion IPO in April.
Looking at pricing performance, IPOs averaged a first day return of 7.8%. Of the year’s 176 Non-SPAC IPOs, 12% priced above their initial filing ranges, an increase from 8% in 2023 and 7% in 2022. Deals that priced above the range performed well on their first day of trading, rising by an average of 24%. In contrast, deals that priced below their initial filing range accounted for 13% of the IPOs and marginally decreased 0.2% on their first day in the market. The remaining 76% of the year’s IPOs priced within their initial filing range, gaining an average of 6.3% on the first day.[2]
Technology Achievements
This year marked a pivotal year for equity markets, characterized by a dynamic interplay of major index performances and new issuance activity. Equity new issuance volumes continued to rise, reflecting renewed investor confidence and robust sector trends. Among the standout deals were significant IPOs that not only captured market attention but also set a new benchmark for future offerings. As always, technology remains at the forefront to drive innovation, speed of execution and efficiency.
S&P Global Market Intelligence: Building Off a Strong 2024 from the Equities Primary Markets Group
Here at S&P Global, our commitment to innovation and excellence in the equity markets remains steadfast. We are excited to build off the strong 2024, which featured the progression of key strategic initiatives highlighted by the achievements noted below.
Infrastructure Enhancements
This year, we achieved significant advancements in our application infrastructure, delivering improved performance, security, and usability across the Equity suite. One of the highlights was the successful migration of all Equities applications to AWS Cloud, ensuring a more reliable, scalable, and future-ready environment.
A standout achievement was the 75% reduction in load times for the Sales Portal, empowering users to access critical information faster than ever. Updates to the Equity IssueNet API introduced new capabilities, such as comments columns, custom column updates, and expanded pricing options for Convertible Bonds deals. Additionally, key fields were added to the Master Book, Sales Portal, and EQIN API to enhance deal sync functionality and simplify the flow of critical deal data from EBB to internal systems.
To modernize the user experience, we overhauled legacy accounting pages by replacing ActiveX-dependent Revenue & Expense modules with state-of-the-art technology, providing a smoother, more efficient experience for all users.
Global Expansion
This year marked significant progress in our global reach, particularly in the Japanese market, where we tailored our platform with region-specific functionalities to better serve diverse client needs. Key enhancements included the launch of a bespoke allocation modeler for seamless deal execution and upgraded API capabilities for smoother integration. Over 50 targeted enhancements were rolled out, further elevating service delivery and driving impact in the region.
In EMEA, we hosted successful roadshows in London, Paris, Stockholm, Oslo, Dubai, and Amsterdam. These events not only showcased our cutting-edge equity suite but also provided invaluable client insights that will guide our future strategies. During these engagements, we actively gathered technical requirements that reflect the specific operational needs and regulatory landscapes of each market. This process involved in-depth discussions with clients and stakeholders to identify pain points, desired features, and potential efficiencies that can be realized through technology.
As a result, we uncovered key areas for improvement, such as streamlining data integration processes, enhancing reporting capabilities, and increasing automation in trade execution. These insights have been instrumental in scoping our development efforts, which are now underway and projected to continue into 2025. Our efforts reaffirmed our commitment to delivering exceptional value and adapting to the unique needs of clients across all markets, ensuring that our technology not only supports current operations but also positions our clients for future success.
Innovation Highlights
Innovation remained at the core of our mission this year, as we continued to push boundaries with advanced analytics, AI, and machine learning. Updates to our analytics dashboard delivered improved views on investor history and deal statistics using BigDough, empowering clients with actionable insights to make more informed decisions.
Our new Investor Targeting module, powered by machine learning, enabled more strategic outreach by gauging IPO interest with precision. Additionally, the launch of iProspectus API capabilities allowed users to seamlessly access key functionalities without relying on UI interaction, streamlining processes, and enhancing efficiency.
In collaboration with leading industry body, we developed the FINRA Rule 5190 Broker Affiliates workflow, ensuring strict regulatory compliance across the street. We enhanced data management by adding new fields to the Master Book and Sales Portal, and improved user experience with alternating color schemes for Split Groups in the Master Book. These advancements demonstrate our commitment to innovation, compliance, and user-centric design, reinforcing our leadership in industry-wide regulatory solutions.
1. *Of note, any comparative analysis for weekly, monthly, and yearly deal totals will exclude the anomaly years of 2020 and 2021, unless otherwise noted.
2. Source: Equity Deals Database
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