City of London Braces for Last Chance at IPO Revival

The year ahead is set to be momentous for initial public offerings, with expectations that household names such as OpenAI could be valued as high as $1 trillion when they float, and SpaceX perhaps even higher. Not only are the technology giants poised to take centre stage, but stalwarts of the high street, including booksellers Waterstones and Barnes and Noble, are weighing a return to public markets. Everyone with an eye on equities anticipates that 2026 will mark the resurgence of the IPO, fuelled by a three-year bull run, robust valuations not seen for more than a decade, and eager investors looking to back new listings.

For founders of high-growth companies, conditions have rarely looked as attractive. Listing on the stock market provides access to substantial capital for expansion, a route for early backers to realise gains, and rewards for founders and staff alike. Private equity firms are likely to follow, keen to exit long-held investments and unlock value where possible. While certain laggards will remain in private hands, examples such as Waterstones suggest that viable public listings could trigger fresh incentives for managers and renewed confidence among partners and employees alike.

The competitive challenge for London is stark. The number of companies listed on its exchange has declined from 2400 in 2013 to just 1800 today. High-profile companies are being acquired, opting for New York’s markets, or retreating into private ownership to avoid the burdens of public listing. London’s IPO market now lags behind Mexico and Oman in volume of new offerings and has dropped out of the global top 20 for listings for the first time. Even with deep British roots, Waterstones has yet to decide between a London or Wall Street debut, highlighting the uncertain allure of the City for established names.

To thrive in this new era, the City of London must act decisively. One priority concerns regulatory reform. While initial steps have been taken with the Edinburgh reforms, additional progress is required. Trimming back excessive governance rules in favour of a simpler regime—demanding only the publication of audited accounts—would streamline the process and save both time and money. Investors would have greater responsibility, yet could choose government bonds if averse to risk. Positioning London as the most lightly regulated major market would appeal to technology entrepreneurs eager to retain control even while releasing equity to the public.

Eliminating stamp duty on share trading would address a significant disadvantage compared to other major exchanges. The present system, in which only temporary relief exists for newly listed companies, is not sufficient when most rival exchanges do not levy such taxes. Scrapping this duty would materially boost London’s competitiveness and bring essential liquidity to its listings.

The London Stock Exchange must also revitalise its outreach, restoring the wider appeal of equity ownership. Campaigns bringing equities to the attention of a broader swathe of potential investors would invigorate demand and solidify London’s position as a viable destination for IPO activity. The challenge is immediate; competing markets in Asia and the Middle East are accelerating their efforts with vigour and innovative reforms.

The stakes are unambiguous. Should the City of London fail to reassert its role during this anticipated IPO boom, it risks permanent relegation from the ranks of major global equity centres. Wall Street will remain dominant, but London’s aspiration must be to surpass regional competitors and remain relevant in the face of rapid international change. The moment is critical; bold action is essential or the City’s long-standing pre-eminence may be lost for good.