London poised for revival in initial public offerings as optimism returns to the market

After several subdued years, cautious optimism is surfacing in the City as London shows tentative signs of revival in its initial public offering market. A modest recovery in IPO activity this year has provided hope of a turning point, as companies such as MHA, Shawbrook bank, and Princes have chosen to list in the capital. MHA’s flotation on the junior Aim market raised £98 million and valued the group at £271 million, marking a notable achievement both for the firm and for the London Stock Exchange itself.

Despite lingering concerns about London losing ground to overseas exchanges, particularly New York and Amsterdam, the numbers for 2025 reveal a strengthening pipeline. Over the past year, over £2.1 billion has been raised from 22 IPOs, the highest total since the 2021 boom. While this is a fraction of the record-breaking £16.7 billion raised from 125 deals four years ago, and below the £9.4 billion from 41 IPOs in 2020, the improvement from last year’s nadir, when less than £778 million was recorded from 17 floats, is clear.

The momentum has been reinforced by interest from large and international companies. Visma, a Norwegian software firm, has provisionally selected London for a potential 2026 listing, and UK businesses such as Loveholidays and Markerstudy are preparing for substantial valuations. Enthusiasm is also evident in the performance of recent IPOs, with Shawbrook’s shares climbing from an issue price of 370p to 474.69p, seen as an encouraging benchmark for the market’s prospects.

Underlying these positive developments is a series of regulatory and government reforms designed to bolster London’s competitiveness. The free float requirement was cut in 2021 from 25 to 10 per cent, while the Financial Conduct Authority implemented a significant overhaul of listing requirements last July. In addition, a three-year holiday from stamp duty on newly listed businesses was outlined in the latest budget, targeting one of the structural challenges facing London’s financial centre. The current 0.5 per cent levy is a persistent concern; it taxes investors who buy shares in UK-listed companies but not those investing in similar US businesses.

Investor composition remains a challenge. Only 11 per cent of UK households own shares, limiting domestic participation compared to more widespread public ownership in the United States. British pension funds, once heavily invested in the UK market, now allocate as little as 4.1 per cent of their assets to London-listed equities. Policy moves are seeking to address this, notably via proposed changes to Isa allowances designed to channel more retail investor capital toward equities.

City advisors and executives express a reserved confidence that this year’s increase in IPO volumes signals a more promising future. The flow of private equity and venture capital exits adds further impetus. Although some structural headwinds remain, market participants anticipate an uptick in both the number and scale of flotations, with 2026 and 2027 already featuring growing pipelines of potential listings. The sustained improvement in conditions and reforms across regulations and taxation are expected to uphold London’s standing among global financial markets.