The ambition to restore London as a premier global hub for initial public offerings has hit a significant speed bump. A wave of the capital’s most high-profile listings from 2025 have seen their valuations tumble in the first quarter of 2026, casting a shadow over the narrative of a sustained London IPO revival hopes.
Data shows that the five largest floats of last year slumped by an average of 26 per cent during the first three months of 2026. This decline is particularly stark when compared to the broader market; even as the blue-chip FTSE 100 climbed by more than 2 per cent and the mid-cap FTSE 250 fell by a relatively modest 5.4 per cent, the newcomers have struggled to maintain their initial pricing.
For investors, the results have been sobering. Many of these companies entered the market during a hopeful flurry of activity in the final quarter of 2025, only to encounter a volatile economic climate and shifting geopolitical tensions in early 2026.
A breakdown of the 2025 listing slump
The losses have been unevenly distributed, but the trend is overwhelmingly negative across the largest entries. Fermi, a dual-listed energy firm specializing in data centres, has experienced the most severe correction, with its share price dropping by 40 per cent since the start of the year.
Shawbrook, a prominent British bank, followed with a decline of approximately 33 per cent. Other notable listings have also struggled: Metlen saw its value drop by 27 per cent, Princes Group, the tinned tuna giant, fell by 16 per cent, and Beauty Tech group declined by 15 per cent.
| Company | Approximate Change | Market Status |
|---|---|---|
| Fermi | -40% | Below IPO Price |
| Shawbrook | -33% | Below IPO Price |
| Metlen | -27% | Below IPO Price |
| Princes Group | -16% | Below IPO Price |
| Beauty Tech | -15% | Below IPO Price |
| MHA | +25% | Above IPO Price |
There has been a rare bright spot in the form of MHA, an accountancy firm with a £360 million valuation. Since its float on the Alternative Investment Market (AIM) in April, MHA’s stock has jumped by roughly 25 per cent, making it the only major recent listing to trade significantly above its initial offering price.
Geopolitical headwinds and market hesitation
The timing of these declines coincides with a broader cooling of the global IPO market. Analysts point to the outbreak of war in Iran at the end of February as a primary catalyst for renewed uncertainty, which has dampened investor appetite for new risk.
This volatility has created a paradox in the capital markets. Jamie Dimon, chief of JP Morgan, expressed confusion over the current drought of new listings in a recent letter to shareholders. Dimon stated he found it “a little surprising” that private equity firms had not “taken greater advantage of healthy markets to take their companies public.”
Dimon further cautioned that the prolonged bull market seen since the global financial crisis may have left the industry ill-prepared for a potential shift, noting, “it’s hard to imagine what will happen if and when we have an extended bear market.”
Prospects for a second-half recovery
Despite the poor start to 2026, some City veterans believe the downturn is temporary. Brian Hanratty, head of capital markets at the brokerage Peel Hunt, suggests that a revival remains possible in the latter half of the year.
Hanratty noted that the current pipeline of companies waiting to go public is the strongest the market has seen in several years. However, he emphasized that a recovery depends on stabilization and a short-term resolution to current geopolitical conflicts.
The primary concern for the remainder of the year is the risk of stagflation—a combination of stagnant economic growth and high inflation—which could force companies to revise their financial forecasts downward, further delaying potential listings.
Market participants are now looking toward potential “anchor” listings that could restore confidence. One such possibility is the RAC, which could potentially jump-start the engine with a float valued at approximately £5 billion.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice.
The next critical indicator for the market will be the upcoming quarterly filings for the 2025 cohort, which will reveal whether these firms can stabilize their operations despite the share price volatility. We will continue to monitor the pipeline for any confirmed dates regarding the RAC listing.
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