The GPW recorded eight IPOs in the first quarter of this year compared to only three a year ago, mirroring a wider European trend of IPO boom. In Europe, as many as 86 businesses went public, raising €22.6 billion, a report entitled “IPO Watch Europe Q1 2021” from the accountancy firm PwC shows. This is more than in the entire 2020, when the pandemic hit economies around the world, causing uncertainty about the future.

London Exchange had the biggest number of IPOs with 26 debuts from January-March, followed by Euronext Amsterdam, which advanced to the second position. The stock exchange hosted four public offerings, including the IPO of Polish parcel locker behemoth InPost, which was the largest in Europe in the first quarter.

The recent increase in the number of IPOs is mainly driven by strong market conditions fueled by postpandemic optimism, improved macroeconomic backdrop and ample amount of quality issuers ready to go public, PwC says. It sees signs that momentum in the IPO market will continue throughout the year.

In Poland, total proceeds from IPOs amounted to PLN 1.8 billion, out of which PLN 1.7 billion came from mobile games producer Huuuge. Its debut became the second biggest in Warsaw after e-commerce heavyweight Allegro, which raised about PLN 9.2 billion last year. US-registered Huuuge says it would use the IPO proceeds on potential acquisitions and investments.

HUGE APPETITE

The brand Huuuge Games has existed since 2014. However, Huuuge’s history is much longer. Its CEO Anton Gauffin came to Poland in 2005 in his search for programmers for his firm, Gamelion. Two years later, he sold his share in Gamelion and moved to Silicon Valley. In 2014, Gauffin received the opportunity to spin Gamelion out into an independent entity again and this is how Huuuge was born.

The company, which has 10 offices worldwide and employs over 600 people, went public at a time when coronavirus-related restrictions kept people at home, boosting demand for online entertainment. Share in its debut on February 19 opened at PLN 50 per share, equal to its IPO price. The debut was among the 15 largest IPOs in Europe in the first quarter. The second debut at the GPW’s main market was the IPO of online fashion retailer Answear.com, which raised PLN 80.5 million. 

Answear sells brand clothing, footwear and accessories in seven countries, including Poland, Czechia, Slovakia, Hungary, Romania, Bulgaria and Ukraine. The platform offers about 90,000 products from 350 global brands. Poland is still its largest market, however, about 70 percent of its revenue comes from abroad.

“Entering the stock exchange is a natural step for us connected with a dynamic business development, a large scale of operations and an appetite for more,” Krzysztof Bajołek, president of the management board at Answear said ahead of IPO. The share price at the debut was PLN 29.9, showing an increase of nearly 20 percent against the offer price of PLN 25.

NEWCONNECT WELCOMES TECH ENTERPRISES

Run by the GPW, NewConnect – an alternative stock exchange allowing smaller concerns to float shares – welcomed six firms in the first quarter. Medical technology company Genomtec raised the highest proceeds of PLN 8 million. The Wrocław-based biotech business is one of the few producers of mobile molecular analyzers in the world as well as the only one on the European market. Its core product is Genomtec ID – a portable device for detecting infectious diseases and viruses.

“Fast, inexpensive and reliable diagnostics is the dream of many doctors, veterinarians, parents, patients and scientists. It is also a condition for humanity to be able to effectively fight such threats as growing antibiotic resistance, increase in the number of cancer cases or complications due to bacterial and viral infections,” its website says. Genomtec shares jumped by more than 50 percent at the first minutes of trading on March 17 to PLN 16.6 versus an IPO price of PLN 11. It plans to use proceeds for clinical development and global commercialization of the Genomtec ID platform.

Apart from Genomtec, the alternative market welcomed several game producers. As the video game market is booming in emerging Europe, Poland became among leaders thanks to its young educated workforce and relatively low labor costs. Growth of the game industry in Poland year-on-year remains on a steady level of nearly 30 percent, according to a report by the Polish Agency for Enterprise Development (PARP).

The first debut on NewConnect this year was held by United Label from the CI Games group. It generates profit from acquiring rights for independent games and managing their distribution. It signed publishing agreements for such games as “Eldest Souls,” “Tails of Irons” and “Horae.” Ahead of the debut, United Label raised more than PLN 4 million in a crowdfunding campaign. Other debuts were organized by game developers Simteract, Incuvo, Atomic Jelly and Kool2Play.

‘WARSAW OVER LONDON’

The first quarter marked a revival in IPO activity, however. The biggest debut on Warsaw Exchange this year may come in the next months. Home accessory retailer Pepco has decided to pursue an initial public offering in Warsaw rather than London, Sky News and Reuters reported, citing sources. The retail giant is valued at around €5 billion, Reuters sources said. Sky News reported that Pepco’s management and shareholders have opted for Warsaw due to Pepco’s huge presence in Poland and estimated group offer at €4.5 billion.

Steinhoff International Holdings, Pepco’s South Africa-based owner, said in January that it was re-examining a range of strategic options for the Pepco Group, including a potential public listing. The retailer, which has over 1,000 stores in Poland, did not comment on which stock exchange it plans to go public.

Another IPO candidate is Polish pay-TV platform Canal+ Polska, which in April revived plans to go public after the deal was scrapped in November due to market volatility and a lack of demand. In early November, Canal+ Polska had set a maximum IPO price at PLN 60 per share, valuing its offering at PLN 1.297 billion. The company is majority-owned by Vivendi’s Canal+ Group (51 percent), with the remaining shares being held by TVN Media (32 percent) and Liberty Global Ventures Holding (17 percent). However, on May 7, financial market regulator KNF stated that the approval process for Canal+ Polska’s IPO prospectus had been suspended at the Polish pay-TV platform’s own request.

The activity on the GPW in recent quarters and the debuts announced for 2021 indicate that this year, which marks the exchange’s 30th birthday, may also turn out to be the time of return for top European stock exchanges, says Bartosz Margol, director at PwC capital markets.