London loses investors: how IPOs fell to a 28-year low
The first half of 2025 was a failure for the London Stock Exchange (LSE). Companies raised less than £200 million through IPOs, marking the worst result since 1997.
Bloomberg writes that this sharp decline was due to a combination of factors, including the outflow of issuers, active buyout deals with subsequent delisting, and the almost complete absence of new IPOs. Consequently, the number of public companies on the LSE is rapidly declining, and the market is losing liquidity.
"The scale of M&A and lack of IPOs is resulting in a material reduction in the number of UK-listed growth companies," Charles Hall, head of research at Peel Hunt said in a research note.
He emphasizes that, without reforms to pension investments, taxation, and individual investment accounts, the situation will only worsen.
AstraZeneca and the threat of a giant exodus
The situation is further complicated by AstraZeneca's plans to move its primary listing to the United States. The company's market capitalization exceeds 100 billion pounds, and its departure could devastate investor confidence in the British market.
According to The Times, AstraZeneca CEO Pascal Soriot is disappointed with the UK's regulatory restrictions in the healthcare sector. He believes the UK lags behind the US and China in the innovation and development of its pharmaceutical sector.
The departure of such a major company could trigger a chain reaction, prompting other companies to seek better conditions outside London. According to Bloomberg, this would jeopardize the LSE's position as one of the world's leading financial centers.
Why are companies fleeing London?
One key reason for this exodus is the discount at which British stocks are trading compared to other developed markets. Companies can get a higher valuation for their shares on US or Asian stock exchanges, which makes London less attractive.
Additionally, there was extremely high M&A activity in 2025, with 48 completed or announced deals in the first half of the year alone. This means that companies are avoiding IPOs and being bought out or withdrawn from the public market.
"Europe suffered its worst first half for IPO volumes in more than a decade, with bourses in Milan, Paris and Zurich seeing lower volumes than London," Bloomberg data shows.
However, the UK was a particularly weak performer. From January to May 2024, it accounted for only 2% of the total IPO volume in Europe, which is an all-time low.
Is there light at the end of the tunnel?
Despite this grim outlook, some experts remain cautiously optimistic. Several new IPOs may appear on the LSE in the second half of 2025. For instance, Hg Capital views London as a potential platform for placing Visma, a software developer valued at 19 billion euros. Recent reforms, such as the allowance of euro-denominated shares in FTSE indices, are facilitating this process.
The largest IPO of the year was MHA Plc's placement on AIM, which raised 98 million pounds. While this amount pales in comparison to previous years, such deals offer hope for a gradual recovery.
What will London look like in 2026?
Hall believes systemic changes are necessary to revitalize the market.
"We are seeing continued outflows of UK capital, which need to be addressed through pension, ISA, and stamp duty reform," he adds that, without such changes, London risks losing its status as Europe's financial capital.
Bloomberg emphasizes that London's problem reflects the broader challenges faced by European exchanges. The situation may improve in 2026 if regulators and the UK government increase the LSE's attractiveness. However, without decisive action, the market may continue to lose ground to New York, Hong Kong, or Shanghai.
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