IPO or Initial Public Offering is the process by which a private company becomes a public company. After an IPO, the company is listed on the stock markets in the country in which the IPO process is completed. It is one of the processes of raising capital from the public by giving them ownership of a certain portion of a company.
So far, 2021 has been a splendid year for IPOs. As per the statistics provided on the Stock Analysis website, there have been 558 IPOs on the US stock market this year, as of June 28, 2021. That is a 481.3% increase from the same time last year which had 96 IPOs by this date.
Such an increase is not only limited to the US, countries all over the world have seen a drastic increase. The reason behind such an increase can be attributed to the bullish nature of the current markets and an increase in the liquidity facilitated by the Federal Reserve and other central banks all over the world.
Companies prefer to go public during bullish markets since they get valued at more than reasonable valuations and usually wait for the markets to turn bullish before offering a part of themselves to the public.
With an attempt to put into perspective the current IPOs being introduced in the stock markets today, this blog explores the top 15 biggest IPOs witnessed by the US markets so far.
Top US IPO to Watch in 2021
The two parameters introduced at the beginning of all the 15 names below are the issue size and the listing date;
Issue size: refers to the total monetary value of the IPO, it is obtained by multiplying the number of shares offered by the company with the issue price per share, it helps in understanding the portion of the company being opened up to the investors.
Listing date: is the date on which the stocks being offered are listed on the stock exchange on which they are offered for trading.
Note: Issue size and listing date data are taken from the Statista website.
Top 15 US-based IPO
Alibaba Group Holding
Issue Size: $21.77 billion
Listing Date: 18 September 2014
Alibaba Group Holding Limited is a Chinese company that, along with its subsidiaries, provides e-commerce, retail, internet and technology services worldwide. It was founded by Jack Ma in 1999, today, it is the 8th largest company in China as per the information available at Investopedia with a market capitalization of $623 billion.
Issue Size: $17.86 billion
Listing Date: 18 March 2008
Visa is one of the world’s biggest financial services companies. It is an American company headquartered in California, United States. It facilitates electronic funds transfers. The Visa brand is very trusted all over the world for financial transactions.
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Issue Size: $16.45 billion
Listing Date: 11 January 1999
Enel S.p.A. is an Italian multinational corporation. It is an electricity and gas manufacturer and distributor. It is Europe’s largest utility company and is the second-largest power company in the world as per data compiled by S&P Global Market Intelligence.
Issue Size: $16.01 billion
Listing Date: 17 May 2012
Facebook, founded by Mark Zuckerberg with his fellow Harvard College students in 2004, is one of the world’s biggest technology companies today. It makes the ‘F’ of ‘FAANG’, the world’s most popular and best-performing tech companies.
Issue Size: $15.77 billion
Listing Date: 17 November 2010
According to Investopedia, General Motors or GM is the seventh-largest automobile company in the world and the largest automobile company in the United States with a market capitalization of $85 billion. Apart from designing, manufacturing, marketing and distributing vehicles and vehicle parts, General Motors provides financial services as well.
Issue Size: $13.03 billion
Listing Date: 17 November 1996
Deutsche Telekom is a German-based company. It provides telecommunication services all over the world. It constitutes 1.92% of EURO STOXX 50, the benchmark index of the Eurozone consisting of 50 blue-chip companies based all over Europe making it the largest telecommunications provider in Europe.
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AT&T Wireless Group
Issue Size: $10.62 billion
Listing Date: 26 April 2000
AT&T Wireless Group commenced the journey of double-digit billion-dollar IPOs by crossing the $10 billion mark in 2000. AT&T Wireless Service, founded in 1987 as McCaw Cellular Communications, formerly a part of AT&T corporation, was a wireless telephone carrier company in the United States.
Issue Size: $8.68 billion
Listing Date: 12 June 2001
Kraft Foods was a global corporation that produced sweets, food, and beverages. It sold a variety of brands in over 170 countries, a lot of these brands had a long-standing reputation of more than a century. A few of these brands include Cadbury, Jacobs, Kraft, LU, Maxwell House, Milka, Nabisco and Oreo.
Issue Size: $8.1 billion
Listing Date: 8 May 2019
Uber is one of the largest firms in the gig economy worldwide. It provides ride-hailing, food delivery, and package delivery. Couriers, freight transportation and vehicle rental services in more than 900 metropolitan areas worldwide.
Issue Size: $7.37 billion
Listing Date: 18 June 2019
Slack Technologies, formerly known as Tiny Speck is a US-based technology company, headquartered in San Francisco, California. It connects people, applications and data in an online mode and is one of the world’s most widely used communication platforms for professional communication purposes.
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Issue Size: $7.29 billion
Listing Date: 17 October 1997
France Telecom, now known as Orange S.A, is a French multinational telecommunications corporation. It is the tenth-largest mobile network operator in the world and the fourth largest in Europe after Vodafone, Telefónica and VEON as per data provided by Crunchbase.
Issue Size: $5.65 billion
Listing Date: 17 November 1997
Telstra is Australia's largest telecommunications and technology business, with a comprehensive variety of communications services and a presence in all telecommunications markets.
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Issue Size: $5.58 billion
Listing Date: 4 October 1998
Swisscom AG provides telecommunication services primarily in Switzerland, Italy, and internationally. The majority shareholding in Swisscom is with the Swiss government. Swisscom is the largest provider of mobile and broadband telecommunication in Switzerland.
United Parcel Service
Issue Size: $5.47 billion
Listing Date: 9 November 1999
United Parcel Service, Inc. provides letter and package delivery, transportation, logistics, and financial services. It operates through three segments: U.S. Domestic Package, International Package, and Supply Chain & Freight. It is a major player in supply chain management. It was formerly known as the American Messenger Company and specialized in telegraphs and UPS.
Issue Size: $5.23 billion
Listing Date: 12 March 2000
Infineon Technologies AG is a German company. It designs, develops, manufactures, and markets semiconductors and related system solutions worldwide. As of 2020, it is the tenth-largest semiconductor company in the world, source: www.reuters.com
It can be observed that the 15 largest US IPOs discussed above have an issue size of more than $5 billion and are spread across all sectors. Strikingly, 5 of the 15 companies operate in the telecommunications industry. The rapid increase in the total market capitalization of the IT sector and the entry of new and new companies in the same might change this trend in the future.
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The blog discussed the 15 largest IPOs hosted in the US markets. Since the US markets are the biggest markets in the world, the 15 largest IPOs hosted in the US markets help gauge the largest IPOs ever hosted worldwide as well.
However, it should be noted that globally, Saudi Aramco, a Saudi Arabian multinational petroleum and natural gas corporation, had the largest initial public offering on the Tadawul on 4th December 2019. Saudi Aramco's initial public offering (IPO) garnered roughly $25.6 billion and constituted 1.5% of Saudi Aramco’s value. It beat the public listing of Alibaba Group Holding on the New York Stock Exchange (NYSE) by almost $4 billion, as per the CNBC report.
Another interesting IPO that caught huge public interest in the recent past was the scheduled IPO of the Ant Group in November last year. Even though it was indefinitely delayed due to restrictions imposed by the Chinese authorities, had it been held, it would have become the largest IPO in the world raising $37 billion for Ant Group.