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North Star: green shoots of Swedish revival give Nordics hope for Q4 IPOs

The surprise triumph of Swedish popstar Loreen in the 2023 Eurovision Song Contest may be repeated in equity capital markets before the end of the year, with a slew of companies prepping for new listings to help revive the Nordics’ traditional premier ECM hub.

According to Dealogic, so far there have only been five Nordic IPOs in 2023 for just USD 436m of issuance volume, none of them Swedish.

The lack of any deals from Sweden is puzzling given that Stockholm has traditionally been the Nordic’s most valuable IPO exchange with USD 45bn of issuance volume since 2003, followed by Norway (USD 36bn), Denmark (USD 16bn), Finland (USD 8bn) and Iceland (USD 2bn).

Sweden is unsurprisingly also where most of the Nordic’s IPO pipeline is based and there are at least two candidates thought to be preparing to pull the trigger. Family-owned local retail chain Rusta has appointed global coordinators for an initial public offering, with a launch planned before the end of the year, as reported by this news service.

A source familiar with the situation, jubilant about the prospects of issuance after a drought in deals, said that his team has been meeting several family-owned businesses that are thinking of IPOs in Sweden to diversify their ownership and fund expansion.

Similarly, Swedish industrial group Novedo is conducting an early roadshow with investors ahead of a potential IPO before the end of the year, according to two sources familiar with the situation. Novedo did not respond to a request for comment.

One consultant found it interesting that two companies are attempting listings in a difficult market but is hopeful that they may be the first trickle of water that breaks the dam.

“It is surprising given the valuation levels, but they must have some indications that it is worth the risk,” the consultant said, adding “if these two are successful, then it is likely that there will be a chain of IPO situations that will follow in the first half of next year.

It would be a proof of concept for many others that are waiting.”

Others are taking longer to prepare, with more deals expected in 2024. But there are some giants in the wings.

The biggest name in the market is perhaps Klarna, the Swedish fintech company whose valuation plummeted last year in a private funding round.

Its CEO recently put the company back on the IPO agenda by saying the company was still targeting a listing should equity capital market conditions improve.

The 2024 pipeline contains another big name in the shape of Northvolt, the Swedish battery manufacturer which is working on an IPO within 12 months.

With Goldman Sachs and Morgan Stanley already appointed as global coordinator, bankers are vying for junior roles in what has been an extensive period of pitching, attribution.

Like Loreen’s Eurovision hit Tattoo, Swedish IPOs could be set to steal the show.

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