BMO predicts that the US IPO market may reach its peak in the next year, with fundraising expected to reach $40-50 billion

According to the financial news app Zhitong Finance, a senior banker from BMO Capital Markets mentioned that the initial public offering (IPO) market in the United States is expected to accelerate next year, with trading volume potentially reaching the highest level in four years. Eric Benedict, Co-Head of Global Equity Capital Markets at BMO, predicts that companies going public in the US next year could raise between $40 billion to $50 billion, representing at least a 32% increase from this year's market levels. This data is based on companies raising over $200 million and excludes blank-check companies. Bloomberg data indicates that this would be the highest level since the stock market boom triggered by the pandemic in 2021. Benedict stated in an interview at the New York office, "We are entering a very unique period." He noted that IPO issuance is expected to accelerate in the first quarter of next year and is likely to continue at least until the first half of 2026. However, the market will present a scenario of "haves and have-nots," where companies with growing sales and strong industry backgrounds will be able to go public, while companies with less stable foundations may face challenges. Over the past three years, global IPO activity has been relatively subdued, and it was only with the Fed rate cuts and increased risk appetite that IPO activity in the US began to slowly recover. Data shows that as of October 22nd, 18 companies listed on US exchanges that raised over $500 million saw their stock prices rise by a cumulative 38%, while companies raising between $100 million and $500 million only saw a 17% increase. Benedict pointed out, "Typically, larger deals are harder to complete because more capital needs to be raised, but what we are seeing is quite the opposite, which is quite healthy." The market, especially private equity firms holding nearly $3 trillion in unsold assets, will closely monitor the situation of Ingram Micro Holding Corp. returning to the public market. This technology company and its owner, Platinum Equity, plan to raise up to $427.8 million through an IPO, which is set to be priced on Wednesday night. Warren Esty, Head of BMO's Investment Banking Division, mentioned that the improved IPO market environment will increase interest in companies going public. Additionally, IPOs may be the only exit option for some large private equity firms that are difficult to sell to peers. He also noted that the Fed is expected to continue cutting rates, which will drive the overall banking industry's recovery. Based on Bloomberg data (excluding some small IPOs), BMO's expectations for next year's IPO market are roughly in line with the levels of the decade before the outbreak of the pandemic, when the average annual IPO size was around $56 billion. Esty concluded, "We are indeed seeing the market returning to the average levels of the past decade and coming out of the trough, which is reflected across all products."