Shares in the London Stock Exchange's newest arrivals have been given a mostly warm welcome this week as the trickle of flotations has turned into a relative torrent, with three new arrivals this week.
Friday saw Princes Group PLC (LSE:PRN) and Cindrigo Holdings Ltd (LSE:CINH) make their debuts after raising £200 million and £2 million respectively in their initial public offers.
Their London debuts follow the listing of Shawbrook Group PLC (LSE:SHAW) a day earlier, after finding demand for almost £400 million in existing and new shares.
Cindrigo shares jumped 12.5% to 13.5p in early dealings before flattening off, while Shawbrook jumped 6.3% on debut yesterday, before dipping slightly on their second day.
Princes' shares fell 4% to 471p by early afternoon on their debut, after being priced at the bottom of a 475p-590p pre-IPO range. There were some extenuating circumstances, as the company's shares are tightly held with just 13% free float.
Its IPO includes a possible overallotment option that could see another £20 million of shares sold at the issue price.
Before this month, just 13 new companies had floated in London this year, raising £208 million between them, compared to the £600 million raised this week.
In early October, Beauty Tech Group listed in London after raising £106 million, and AI-focused electrical grid developer Fermi Inc (NASDAQ:FRMI, LSE:FRMI) started trading on the LSE as part of a dual-listing with New York's Nasdaq at a valuation of $13.8 billion.
Welcome boost for London
This handful of successful IPOs, especially if accompanied by an active after-market in the shares, "would be a welcome boost for London," said Russ Mould, investment director at investment platform AJ Bell.
He said that London has taken plenty of criticism for the relatively limited number of new joiners in the past couple of years, particularly relative to the number of departures.
"Shawbrook represents a good start. It came to market with a mid-range offer price and the share price did well on the first day of conditional dealings, helped by ongoing investor interest in banking stocks, which seem to be firmly back in favour, judging by their barnstorming run of the past couple of years," Mould added.
Princes Group "looks a little different," he said, noting that it priced at the bottom of its range and the initial share price moves were muted, though a lack of wider demand for food producers compared to banks could be a reason, as investors in consumer staples stocks fret about inflation, input costs and consumer spending trends.
"It is early days for both, however," he said. "Successful floats could tempt other companies to test the waters in London, especially as the FTSE 100 index’s run of all-time highs suggests sentiment is more favourable towards UK-listed assets, and it may be easier to find willing buyers at valuations that are sufficient to satisfy would-be sellers. After all, mood tends to follow price.”
Strong autumn comeback
Business Secretary Peter Kyle joined Princes at the LSE for its market debut, delivering a speech where he said the Italian-owned company was a "great British success story".
Princes, which manufactures some of long-loved brands such as Crosse & Blackwell soups and Chicken Tonight sauces, is part of a "strong comeback" for London following the government’s capital market reforms.
The government and regulators have looked to modernise UK listing rules to provide firms more flexibility to raise capital, reforming the rulebook for wholesale markets to improve liquidity, as well as cutting paperwork and making it easier for companies to raise larger sums.
As well as Shawbrook, Greece's Metlen Energy & Metals PLC (LSE:MTLN) floated in September and was promoted to the FTSE 100 as part of the September quarterly review, with more expected to follow.
Kyle said Princes’ decision to list is "not only a huge vote of confidence in this government’s reforms to capital markets but in British business.
"With the FTSE 100 continuing to trade close to all-time highs, we’re making sure the UK is the best place in the world for businesses to start, scale, list and stay.
"I want this to just be the start – with more firms following in their footsteps and choosing London as the financial home for their thriving futures."