Equity Capital Markets Watch

Singapore, 2022 year in review

Top 5 Global IPOs in 2022

The global economy’s growth slumped in 2022 due to risks arising from macroenvironmental factors such as the war in Ukraine, supply chain disruptions, tight labour market, persistently high inflation, central bank tightening and the enduring impacts of the pandemic. This has shaken the stability of the equity markets, increased initial public offering (IPO) volatility and impacted the post-IPO performance of transactions completed in 2022. Despite this, equity markets have still witnessed large IPOs across the different equity markets.

Exhibit 1: Top 5 global IPOs in 2022*

_{Source: PwC Global IPO Watch Q3 2022 and PwC analysis

*As on 2 December 2022}

Overview of Singapore IPO activities

Despite more IPOs completed on the Singapore Exchange (SGX) in 2022, 15 compared to 13 in 2021, the total IPO proceeds raised this year was S$0.58bn, S$1.12bn less than in 2021 (Exhibit 2). A large contributor to the fall was no new Real Estate Investment Trust (REIT) listings being completed in 2022. In 2021, SGX witnessed two REIT listings, Daiwa House Logistics Trust (S$464.4m) and Digital Core REIT (S$822m). However, by excluding the listing of the REITs in 2021, the total proceeds raised in 2022 has increased to S$0.58bn from S$0.37bn year-on-year (YOY).
The higher number of IPOs in 2022 on the SGX was driven by the listing of the first three Special Purpose Acquisition Companies (SPACs) with total proceeds from listings amounting to S$528m.

Exhibit 2: Number of SGX IPO deals and funds raised (1 January 2021 – 2 December 2022)

_{Source: SGX}

Mainboard new listings

Vertex Technology Acquisition Corporation (VTAC), one of three SPACs listing in 2022, was the largest IPO on the SGX Mainboard with S$208m fund raised.
SGX welcomed the secondary listing of NIO Inc, a global smart electric vehicle company and the first company in the world to be listed on three exchanges – the New York Stock Exchange, The Stock Exchange of Hong Kong and SGX, and Emperador Inc., a leading high-growth international spirits company which is primary-listed on the Philippine Stock Exchange.
IPO volume on SGX was down in the second half of the year resulting from the stalling of the globally economy.

Catalist board new listings

The largest IPO on the SGX Catalist was the listing of Alpina Holdings Limited with a deal value of S$11.47m.

SGX sustainability reporting: what’s new starting from 2023

Since financial year commencing in 2017, Singapore Exchange Regulation (SGX RegCo) has required issuers to have a sustainability reporting on a "comply or explain" basis. Primary components of a sustainability report are:

Reporting framework
Materiality assessment
Policy, practices and performance reporting
Target setting
Statement by the Board

In December 2021, SGX RegCo released a roadmap for climate-related disclosures to be made mandatory in issuers’ sustainability report. This is to address the urgent demand for such information from lenders, investors and other key stakeholders given the physical and transitional risks of climate change, including understanding the potential opportunities.

Climate related disclosures should be based on recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), include scope 1 and 2 Greenhouse Gas (GHG) emissions (scope 3 where applicable) and scenario analysis consistent with 2°C or lower.

Other requirements for listed companies on SGX effective from financial year commencing in 2022 are:

Minimally subject the sustainability reporting process to internal or external review
Board diversity disclosures
Proposed core ESG factors (27 factors)
Mandatory board directors training
Sustainability reports to be issued with annual report (within 4 months of financial year end) unless subject to external assurance (5 months).

Performance in key regional bourses

Indonesia continues to lead in the Southeast Asia (SEA) region in terms of IPO volume. The Indonesian Stock Exchange (IDX) witnessed two large IPOs:

PT GoTo Gojek Tokopedia Tbk listed on the 11 April 2022. The company offers mobility, food delivery, logistics, e-commerce, and financial technology solutions to customers in Indonesia and raised approximately US$1.1bn.
PT Global Digital Niaga Tbk (Blibli) listed on the 8 November 2022. This is an e-commerce company that raised approximately US$513m.

Malaysia overtook Thailand to come in second in terms of IPO volume after seeing a slight increase from 2021 to 2022. The biggest IPO was from Farm Fresh Bhd, a fast-growing, vertically integrated dairy group engaged in the business of farming, manufacturing, and distributing various dairy products and plant-based products. The company listed on the 28 February 2022 and raised approximately US$238m.

Although the SEA economy has gradually exited from the COVID-19 pandemic, the impact of the global economy downturn will continue to dampen IPO activity within the region. However, we believe companies that can demonstrate ability to generate stable cash flow and those with strong profitability track records will continue to be attractive for investors and such companies could dominate the SEA IPO scene in 2023.

The road ahead: 2023

With investors expected to become more selective and price sensitive in 2023, potential issuers must focus on becoming fit for listing and avoiding typical pitfalls throughout the process such as:

Lack of IPO preparation and unable to meet due diligence requirements
Poor investors engagement
Unable to present both financial and non-financial information to support the equity story
Lack of a clear and demonstrable path to profitability

“The outlook for IPO market in 2023 will continue to be challenging in view of the uncertain interest rate environment, concern over the political recessionary market and the yet-to-be stable geopolitical situation in the world.”

Tham Tuck SengCapital Markets Leader, PwC Singapore