2025 could bring a welcome boost to the City of London as a series of IPOs may take place this year.
Despite the FTSE 100 hitting another record high recently, from a listing perspective, the UK’s stock market remains stuck in a rut. Fewer than 20 companies listed in on the main market in London last year, the lowest number since the global financial crisis.
And many UK stocks have been taken private, reducing the number of public companies. Some, like gambling site Flutter FLUT have opted to move their primary listing from London to capital rich New York. Others, like UK firm Arm Holdings ARM, have chosen to shun London and list in the US.
London’s fall from grace has UK policymakers fighting to revive UK capital markets, with a range of initiatives planned. Chancellor Rachel Reeves has recently picked up the cause of reviving UK public markets.
2025: Shein Dominates the Roster
But could 2025 mark the beginning of London’s listing recovery?
The roster of expected IPOs in 2025 covers a range of sectors from fintechs to top fast fashion brands.
PitchBook’s Navina Rajan, senior analyst of EMEA private capital, estimates that 373 companies in Europe have a high probability of exiting via IPO, with the UK and the pharma sector leading the pipeline.
But the UK IPO that is at the forefront of the City’s mind is fast fashion firm Shein. Although its flotation remains controversial, Shein could bring a $66 billion valuation 2023 global business to the FTSE, according to PitchBook Data as of May 2023.
UK IPOs That Could Hit the Market in 2025
- RC Fornax
- Metlen Energy & Metals
- Ebury
- Parameta
- Waterstones
- Unilever Ice Cream
- Shawbrook
- Monzo
“The sentiment is generally negative around public equities and negative specifically about UK public equities and listings,” says Michael Field, chief equity market strategist at Morningstar.
“The fact that we have a list now of companies saying that they would like to IPO, and this is the beginning of the year, is definitely a positive.”
UK IPO Watch: The Most Likely for 2025
Shein
Chinese fast fashion giant, Shein, will potentially list on the London Stock Exchange this year which has bolstered hopes that the UK can regain its standing among global financial capitals.
The company, founded by the reclusive billionaire Sky Xu, filed confidential papers last year for the IPO but is waiting for regulatory confirmations in the UK and China.
The Singapore-domiciled company first sought a float on the New York Stock Exchange, but it was rebuffed by US regulators because of growing tensions between the US and China.
However, the IPO is marred in controversy over accusations that Shein has exposure to cotton sourced from Xinjiang, a region where forced labor is used in some industries.
“You’ll find managers being split down the middle. One half will say this is one of the fastest growing names in global retail, so to have that on the London market would be very interesting,” says Daniel Coatsworth, investment analyst and editor in chief at AJ Bell.
“On the other hand, you have got some fund managers that will not like the risks that come with it. Some might miss out if the share price goes up, but they will argue that it’s not the type of company they want to invest in because it’s just not transparent enough.”
RC Fornax
Bedford-based RC Fornax, the defense sector consultancy business, is planning to list on London’s AIM market in February. According to PitchBook data, the IPO could value the company at £5 million. The business was founded in 2020 by Royal Air Force veterans Paul Reeves and Daniel Clark. According to company reports, last year it generated revenues of £6.5 million and its earnings before interest, tax, depreciation and amortization hit £900,000.
Metlen Energy & Metals
Athens-based Metlen Energy & Metals MYTIL is moving towards a London listing. In a review, the global industrials business has decided to make London its primary listing, whilst maintaining a secondary listing on the Athens Stock Exchange.
Key Morningstar Metrics For Metlen Energy & Metals MYTIL
- Quantitative Economic Moat: None
- Quantitative Fair Value Estimate: EUR 43.53
- Quantitative Morningstar Rating: ★★★★★
- Quantitative Morningstar Uncertainty Rating: Medium
- Forward Dividend Yield: 4.63%
- Sector: Utilities
Evangelos Mytilineos, Chairman and CEO of Metlen, noted that the company has had a longstanding presence in the UK making it a natural home for the company.
The group’s current market capitalization is £3.89 billion, and it is currently trading at €35.68. However, over a one-year period its share price has fallen by 12.22%.
Ebury
Ebury, British payments start up backed by Spanish bank Santander BNC, is planning to float on the LSE and is collaborating with Goldman Sachs and Bank of America to assist them. Rumors that Ebury was planning to IPO swirled last year, and reports suggest its valuation could reach around £2 billion.
The fintech was founded in 2009 by Spanish engineers Juan Lobato and Salvador García, and Santander bought a majority stake in the business in 2020 for £350 million. Ebury offers cross-border payments, payroll transfers, currency risk management, and business lending.
Shawbrook
UK retail and commercial bank Shawbrook’s private equity owners are looking to list the company on the LSE for a valuation of £2 billion. According to reports, its private equity backers are looking to appoint Goldman Sachs to assist with the IPO. Although, the IPO’s success is dependent upon market conditions.
In 2022 the company attempted to IPO but was forced to shelve plans because of weak market conditions. In Q3 2023, Shawbrook Bank approached Metro Bank about a takeover deal, and then the Co-operative Bank about a £3.5 billion merger.
UK IPO Watch: Will They List in London?
Parameta
Financial broker TP ICAP TCAP, which is already listed on the LSE, is mulling over a potential listing of its Parameta Solutions data unit, which provides financial data and analytics to institutional clients. However, New York may be the destination that TP ICAP chooses for the float.
Key Morningstar Metrics For TP ICAP TCAP
- Quantitative Economic Moat: None
- Quantitative Fair Value Estimate: GBX 2.80
- Quantitative Morningstar Rating: ★★★
- Quantitative Morningstar Uncertainty Rating: High
- Forward Dividend Yield: 5.46%
- Sector: Financial Services
Reports suggest that Parameta Solutions could be valued at around £1.5 billion. Pretax profit jumped 32% to £120 million in the first half of 2024 up from £91 million the year prior. AJ Bell’s Daniel Coatsworth believes that the IPO could create more interest around TP ICAP because they would be splitting out a part of the business that could be worth more than its own valuation.
Waterstones
UK bookstore Waterstones may IPO in either London or New York. CEO James Daunt said that an IPO would be "a very sensible place" for the group.
He also said that 2025 would be a year of significant expansion for Waterstones and Barnes & Noble as they continue to open new stores in the UK and the US. Despite the rise of e-books and Amazon, Waterstones remains the largest bookseller by stores on both sides of the Atlantic.
Unilever Ice Cream
Consumer goods giant Unilever ULVR, confirmed last year it is planning to list its £12.48 billion ice cream division. The maker of Ben & Jerry’s originally sought to sell to a private equity buyer but later shelved the plan. Unilever has not decided where the IPO will take place.
Key Morningstar Metrics For Unilever ULVR
Analyst: Diana Radu, CFA
- Economic Moat: Wide
- Fair Value Estimate: GBX 4380.00
- Morningstar Rating: ★★★
- Morningstar Uncertainty Rating: Low
- Forward Dividend Yield: 3.19%
- Sector: Consumer Defensive
For Charles Hall, head of research at Peel Hunt, there is no guarantee that Unilever will float Ben and Jerry’s on the LSE. It may even choose Amsterdam as a more suitable location because of its historical connection to the Netherlands. Still, Barclays analysts believe that Unilever would be better off listing the company in both London and New York.
Monzo
London-based Monzo is eyeing up a flotation. But the fintech’s management are at odds on where to list.
Monzo’s CEO TS Anil wants the digital bank, valued at £4.17 billion according to PitchBook Data as of May 2024, to list in the US, while the board wants it to float in London. Monzo has not set a date for its IPO and wants to wait for the right market conditions to go public.
However, Monzo is one of the stocks in the UK’s fintech sector that investors hope will improve London’s fortunes, with Revolut and Starling also planning to follow suit.
Is the London Stock Exchange on a Road to Recovery?
Despite the upcoming listings, investors across the City of London remain skeptical that London’s luster has returned, as structural issues impeding London’s attractiveness persist.
For Michael Field, chief equity market strategist at Morningstar, some hope can be gleaned from the diversity of stocks attempting to list on the LSE. However, many of these companies are not global juggernauts nor are they in industries which could experience the growth that the US tech names have enjoyed.
“We can turn things around. The problem is there are no quick fixes. We really need to pour money into certain sectors like IT and pharma, we need to build more startups, and we need to try and build deeper capital markets. Pension reforms could certainly do a lot of things to boost the attractiveness of equity markets in the UK. But it is a long process,” he says.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.
