London's equity market has experienced a significant downturn, recording the lowest IPO figures in 30 years. This has raised new concerns about the UK's future on the global financial stage.
Decline of the IPO Market in London
In the first half of 2025, only five companies floated on UK markets, raising a total of £160 million, marking the lowest tally in 30 years. In contrast, the market raised £200 million from two listings in the first half of 2009. The current £160 million figure is not only 28% lower than post-crisis lows but also a staggering 98% drop from the early 2021 boom.
A senior equities analyst from Goldman Sachs explains London’s fall from grace, stating, "Fewer companies are listing, they are less liquid, we see the best growth companies listing elsewhere, and any companies that arise are reluctant to list in the UK."
Shein and IPO Challenges
Shein, a fast-fashion giant founded in China, has long sought an IPO in London, but the process has stalled due to regulatory objections regarding the disclosure of its Xinjiang-linked supply chain. Although the UK Financial Conduct Authority (FCA) approved one version of its prospectus, Chinese regulators, notably the China Securities Regulatory Commission (CSRC), rejected it.
Reports suggest that Shein has filed a confidential draft prospectus for a separate IPO in Hong Kong. While Hong Kong remains a primary target, industry sources indicate that this move serves as leverage to urge the UK regulator to accept the CSRC-approved version and revive the London listing. Securing Shein would signify a revival in market sentiment.
London Scrambles for Solutions
As the UK enters the second half of 2025, London finds itself at a critical juncture. The next quarter will be telling: success in landing Shein or a similar blockbuster listing, clarity from the FCA–CSRC on prospectus terms, improved global market sentiment, or a moderation in US tariffs could help restore momentum.
Conversely, further IPO pullbacks, high-profile companies migrating to New York or Hong Kong, or continued regulatory tension may further cement London’s status as an afterthought in global capital markets.
The situation in London’s IPO market is precarious, and urgent measures are needed to remedy the situation. Success in attracting leading companies and improving regulations may help restore confidence in this vital financial center.
