Companies across the world raised $28.5 billion through initial public offerings (IPOs) during July-September period of 2011, with the Asian region accounting nearly half of the total amount garnered, according to a report by Ernst & Young.
The report said that Asia would continue to lead global IPO activity in the coming quarters as well.
A total of 284 deals raised $28.5 billion via IPOs in the third quarter of calender year 2011 compares to $65.6 billion mopped-up via 383 IPOs in the preceding quarter. This represent a 26% decrease in deal count and 57% drop in capital raised, the report noted.
In the third quarter of 2010, there were 302 IPOs which raised $52.5 billion.
The situation indicates that there has been a lull in the primary market scenario across the world.
Asian issuers continue to dominate IPO activity in the quarter with 138 deals, raising $13.5 billion altogether 47% of global funds garnered. However, this is the lowest level of capital raised by Asian issuers since Q2 2009, when $3 billion were raked in via 44 deals.
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In addition, European firms completed 69 deals, which raised $8.8 billion (31% of global funds raised), this was significantly less than Q2 2011 ($21.7 billion in 96 deals).
Further, North American region raked in $4.5 billion in 41 deals (16% of global fund raised) as compared with $11.6 billion raised with 55 deals in the second quarter.
"The third quarter results show that the Eurozone and US debt crisis have had a deep impact on the IPO market and on both issuers and investors' confidence. However, there are many very good businesses still waiting to go public. Companies have not stopped seeing IPOs as a way of raising capital. They are waiting for markets conditions to improve, while continuing to prepare for their IPO," E&Y Global Strategic Growth Markets Leader Maria Pinelli said.
In the third quarter, there were only 3 deals which raised over $1 billion. Besides, average deal size decreased to $100 million in third quarter of this year compared to Q2 2011 ($171 million).
Among the sector, financials sector raked in a total of $6.8 billion from 16 deals, followed by materials ($5.8 billion from 72 deals) and industrials ($4.3 billion from 48 deals).