A host of smaller-cap listings is giving some pre-summer cheer to European ECM, but the market has yet to see larger deals come to fruition.

The successful IPO of Germany’s Pfisterer last week, alongside Athens based fin-tech Qualco, combined with the live IPOs of cobalt holding company Cobalt Holding and German software company innoscripta, have given ECM professionals hope that the year can be saved for new listings.

Pfisterer’s plans to list came with a modicum of risk when the company issued its intention to float (ITF) in late April, according to an ECM banker close to the deal. Fears over tariffs were still a big theme at the time, despite a pause in hostility between the US and other trade partners for 90 days.

Over the course of marketing, though, the mood improved exponentially, with trade talks between China and the US leading to a pause in hostilities between the two world’s two largest economies alongside a recovery in both European and US equities.

Source: Dealogic

“When Pfisterer was launched, it wasn’t clear that it was the right time to go, but things all then went in the right direction,” the banker said. “The talks with China went well and there as a key recovery across sectors and the US Nasdaq-listed stocks.”

Investors are engaging as well, with one telling ECM Pulse that they are back-to-back with meetings.

The banker close to Pfisterer cited an incredible amount of demand for meetings during the roadshow. The syndicate set 180 meetings for an IPO worth EUR 188m.

The sheer number of meetings gave confidence to the deal teams. Most investors then converted with around 130 lines in the book from global and local long-only investors alongside small-cap specialists and some retail investors, according to a transaction debrief seen by ECM Pulse.

As a result, the global coordinators, Berenberg, Commerzbank and LBBW, were able to skew the book to the top ten investors while scaling back smaller orders. This created demand on day one.

Pricing was also conservative, with the deal priced in the middle of its initial range at EUR 27 a share. The deal was however covered all the way to the top of its initial price range of EUR 25 to EUR 29 each, according to a separate deal note also seen by ECM Pulse.

“The pricing was designed that way,” the banker said. “We wanted to price at a level that was attractive for investors but sent the message that the deal was covered far above that level, to give confidence there was demand higher up the range.”

Pfisterer is up around 11% from IPO price. Qualco is also up significantly from its offer price in Athens. If Cobalt and innoscripta price well and trade up, it will start to create momentum and demand in the market for other, likely larger, listings, several market participants told this column.

Bigger tests to come

The success of the first European IPOs since the market meltdown over the on-off application of universal tariffs in the US is a strong signal to the market that the market is functioning for some stories.

However, the market is a long way, yet, from being fully open. All the companies coming to market in the pre-summer window so far are smaller-cap assets, with listings equivalent to low hundreds of millions of dollars and can rely on strong pockets of domestic demand to help them across the line.

Multi-billion-dollar listings remain an untested proposition in Europe with far greater levels of demand required to get across the line.

Two further ECM bankers pointed to Portugal Novo Banco, reportedly preparing for a June IPO, as the first true test of market sentiment.

Novo Banco sits in an attractive segment given the performance of listed European financial institutions. Europe’s STOXX Banks 600 is up over 30% in the year to date (YTD), as investors flow into large, defensive, European stocks to offset trade volatility.

But not all sectors will fly in a more risk-averse market, one of the bankers said. Quality will be key.

An investor speaking to ECM Pulse note that his firm are engaging with IPOs again but are focused on cyclical resilience a lack of leverage and compelling valuation when considering whether to back an IPO.

Possible 2H deals include German pharmaceutical company Stada, Dutch telco Odido, security systems provider Verisure, financial technology provider ISS Stoxx, SMG Swiss Marketplace Group (SMG), alongside a host of other names.

A slight cloud hangs over European issuance in that tariff threats have not gone away. US penalties on European trade were paused for 90 days to allow for negotiations with individual partners. If Donald Trump’s administration does not come to a satisfactory conclusion in bilateral discussions with major trade partners, they could be introduced again.

“When the tariff pause comes to an end, it’s likely president Trump will feel the need to make some noise to increase pressure on trade partners, which would impact market sentiment,” the first banker said. “We felt that pretty clearly, and therefore, with Pfisterer, wanted to get the deal away in the middle of the tariff pause.”