With the season of Lent starting last week, Europe’s equity capital markets are planning through the season of fasting to the feast of the Easter IPO window, but there are concerns that rising equity volatility could diminish deal appetite.

On paper, it could not be a better time for new listings in Europe. The Stoxx 600 is outperforming US benchmarks and European ECM volumes are soaring, as investors allocate more capital to under-owned European stocks.

While there was a small number of European listings in January, the weeks around Easter are the first time companies can come to market using full-year results and traditionally, it is a time for some of Europe’s top listings in any given year. Following Easter, there is a relatively open stretch until summer for deals to be done.

There are several names reportedly in discussion for pricing in the first half of this year, including Blackstone [NYSE:BX]-owned Spanish gaming company Cirsa, and German pharmaceutical company Stada, coming from Bain Capital and Cinven.

Alongside these two names, German listings for bank OLB and AutoDoc SE are also possible before the summer, as is an Amsterdam listing of Dutch Telco Odido, although that is likely coming a little while after Easter.

Ottobock and Brainlab AG are two other German names in the pipe reported to be targeting a listing in the next few months alongside the German division of Dutch State-owned utility company TenneT.

That deal could be less imminent given reports that the company is also exploring a minority stake sale and there is also a reprivatisation of utility firm Uniper [ETR:UN0], which, while technically a follow-on, is essentially a re-IPO.

US volatility weighs on European IPOs

If all these deals, and perhaps some others, are priced before the summer, it will mark a turnaround for European IPOs after a mixed start to the year.

Source: Dealogic

Excluding Turkish deals, there have been three IPOs priced in Europe so far this year sized at over USD 100m – the Spanish IPO of HBX Group [BME:HBX], the Amsterdam listing of logistics company Ferrari Group [AMS:FERGR] and the Warsaw listing of medical diagnostics company Diagnostyka [WSE:DIA], the only one of the three trading above IPO price.

“We haven’t had a good start to the year and not much strong performance, in terms of IPOs, in Europe or the US,” noted one ECM investor pointing to aftermarket losses on deals on both sides of the Atlantic. “It is a bit of a frothy market at the moment.”

ECM bankers have also acknowledged that new listings have been under pressure so far in 2025, and that is something that needs to be considered when marketing new deals around Easter.

The case of HBX has been particularly concerning, given the large discount offered by the IPO sellers to its main listed peer and a book that contained mostly quality long-only investors. Yet the stock remains below IPO price.

An underwhelming start to the IPO year is also being juxtaposed with rising market volatility driven by the US.

The CBOE VIX index, the benchmark tracker of US volatility and harbinger of IPO doom, is back above 20 and has risen 62.5% in the last month.

Concurrently, the S&P 500 has fallen 6% from its most recent high on February 19 and the NASDAQ 100 is down around 9% from the same date, skirting dangerously close to a market correction.

European indices have largely outperformed the US YTD, but the Stoxx 600 has not been entirely immune from these nerves, down around 1.8% last week.

The cause of investor woes has been attributed to the tariff policy from US president Donald Trump as well wider concerns over the strength of his country’s economy in the face of several iconoclastic economic initiatives, both domestic and foreign.

The break-neck speed, and unpredictability, of the new administration is causing some worry among IPO dealmakers, given typical exposure to around four weeks of market risk, unlike the huge flow of European blocks YTD where books are only open over a few hours after markets close.

“Several issuers we are talking to about IPOs in the next window have some nice big businesses, which we think could do well, but they are getting a little nervous, particularly if the market continues to do what it is doing,” said an ECM banker.

Lacking FOMO

The IPO dynamic in Europe, since the start of 2022, is that businesses that are brought to market, and do well once priced, are so unique and attractive that investors want to buy them regardless of underlying markets.

If not they are structured at such an attractive price point, vs a listed peer, that buysiders would be churlish not to at least engage with the deal initially.

In a more volatile market, an even greater discount is needed to offset broader equity concerns.

“You can of course bullet-proof these deals on price and logically make the case that Europe is in a healthier place than the US,” the banker said. “But lots of issuers don’t want to give that extra discount given European IPOs are such a buyers’ market already.”

The investor, plus another speaking to ECM Pulse, noted that the next crop of IPOs coming to Europe were largely good businesses and attractive at the right price, but did not fall into the “must own” bucket that allows an IPO to sail through volatility just on merit.

These companies do exist in the European pipe, both noted, but added they were likely coming later in 2025 or even in 2026. Both pointed to Swiss security services group Verisure and Norwegian software company Visma as two IPOs that would generate real investor fear of missing out (FOMO) when brought to market.

However, the next crop of IPOs must be compelling on price. “It’s a tricky conversation,” the banker said. “It’s not easy telling an issuer that their asset isn’t a must-own so has to come cheaper.”

If markets sink even lower, some issuers may choose to stay away from the market rather than sell their asset too cheaply or risk the process being derailed by political instability.

But they might have a long time to wait. A second ECM banker noted that Trump volatility had made confidence in the market “brittle”, but this volatility could be sustained for some time.

“Trump will be in power for at least three more years, meaning sellers can’t afford to stay on the sidelines indefinitely,” he added. “Ultimately, issuers will need to bite the bullet.”

Sometimes it pays to deal with the devil you know and in this new geopolitical world, who knows what might be round the corner.