$23 billion was raised in the global IPO market this week, trumping the week of China Agri's record-breaking debut in July and making it the busiest this year. Combined with positive aftermarket returns, the massive volume of new equity issuance signals an upswing in the IPO market, and a revival in investor interest for these new and exciting equities.
Taking the spotlight was a Hong Kong offering by AIA (1299.HK), a carveout of AIG's Asia Pacific life insurance business and the only pure play Pan-Asian life insurer. The company initially planned to sell 5.9 billion shares between HK$18.38 - HK$19.68 a piece (deal size of $14 billion at the mid-point), but, in response to overwhelming demand, sold an additional 1.2 billion shares after pricing at the top of the range to raise a total of $17.8 billion, making it the fifth largest IPO on record. Also in Asia were a flurry of other Hong Kong and Indian offerings, and a notable $200 million IPO by Taiwan's TPK Holdings (3673.TT), the supplier of the touch screen technology behind Apple's iPad. Up next is the highly anticipated Coal India IPO (COAL.IN), set to raise an estimated $3 billion in what may be the country's largest-ever initial public offering this weekend.
In the U.S. notable deals included designer handbag maker Vera Bradley (VRA), Chinese education provider TAL Education (XRS) and Italian restaurant chain Bravo Brio (BBRG), which raised a combined $440 million. South America's IPO market also contributed to the busy week - oil & gas start-up HRT Participações (HRTP3.BZ) sold $1.4 billion in new stock in a Brazilian IPO on Thursday. Adding to the buzz was the announcement of a billion dollar IPO of OHL Concesiones Mexico, a spin-off Spanish construction firm Obrascon Huarte Lain's Mexican operations, expected before the close of the year.
Headlining IPO news in Europe was Norwegian oil & gas company Statoil's spin-off of their fuel retail business, Statoil Fuel & Retail (SFR.NO). The company raised $800 million after pricing at the top of the range Thursday evening and listed on the Oslo Bors on Friday. The world's largest online betting exchange, London-based Betfair (BET.LN), also made its public debut - raising $540 million before listing on the LSE. On the calendar in the region is a $4 billion offering by Italian energy company Enel SpA of their green power unit, Enel Green Power (EGP.IM), set to price next week.
Strength in the global IPO market is not only evidenced by volume and total dollars raised, but is also apparent in returns. The average 2010 IPO has returned 6.3% from its first day close to date, outpacing the 4.8% YTD return of the MSCI World Index.
Heavy deal flow, positive returns and a swelling IPO pipeline suggest an active close to an already active year, and an IPO market that has finally returned to more normalized issuance levels.
