After Germany’s recent federal election provided clarity on the political landscape, equity markets have gained a level of certainty.

In 2025, ECM volumes have been understandably muted due to the elections, standing at USD 3.2bn as of 6 March 2025, down from USD 3.48bn over the same period last year.

Despite the slow start, the sentiment in the country has picked up following the election of a new government, an ECM banker in the region said.

This sentiment was echoed by a German banker, who pointed to the upcoming IPO of the German unit of TenneT and the stake sale of Uniper [ETR:UN0] as two processes likely to accelerate because they rely on government approval to execute.

Additionally, clarity may soon emerge regarding the potential takeover of Commerzbank [ETR:CBK] by UniCredit [BIT:UCG].

The improved mood follows a prolonged decline in ECM volumes in Germany since their 2021 peak. ECM issuance tumbled from USD 46bn in 2021 – the highest since 2014 – to USD 13.4bn in 2024, a 71% collapse in volumes, although 2021 was a historical anomaly for ECM volumes globally, with markets fuelled by pandemic-era central bank relief.

The collapse in volumes since 2022, occurred as the equity markets globally suffered during the post-Covid-era synonymous with high inflation, rising interest rates and the war in Ukraine.

Last year, IPO expectations were high, with Flix, the bus services firm backed by General Atlantic, Permira, and BlackRock; and Sunrise Medical, the assistive mobility solutions company formerly backed by Nordic Capital, both seen as potential blue-chip listings. However, both opted for private stake sales instead of public offerings.

This year, there is renewed excitement around German IPOs, despite concerns over Trump tariffs affecting US-exposed firms.

“The IPO pipeline for the DACH-region is currently shaped by rather old-economy names, reflecting the current investor appetite for profitable and cash-generating, established companies,” Philipp Suess, Head of Equity Capital Markets at Goldman Sachs in Germany and Austria, said. “One sunny day, doesn’t make a summer, but we’re optimistic, but ideally would need to see a number of successful IPOs in the DACH region to improve the sentiment and get the momentum going.”

Notable ‘old-economy’ names eyeing an IPO this year include: Stada Arzneimittel, Ottobock and Brainlab AG.

There are also possible IPOs for German firms AutoDoc and Oldenburgische Landesbank in what would be a super half-year of IPO volumes for Germany if all deals came to fruition.

Follow-on volumes of USD 2.2bn have boosted German ECM so far, with sell-downs in Siemens Healthineers AG [ETR:SHL] and Fresenius Medical Care AG [ETR:FME], the latter through a combination of a block trade and exchangeable bond issuance, leading the way.

A convertible bond in TAG Immobilien AG [ETR:TEG] of EUR 332m due March 2031 also brought some cheer.

“The elections paused activity, but now we have certainty. Expect to see a lots of activity in the blocks space,” said an ECM banker in the region.

With Germany’s immediate political future settled, ECM activity appears poised for recovery. “We’ve seen good momentum in some of the recent transactions, and the pipeline is building. If the first few deals go well, that should give the market conviction,” the ECM banker concluded.