Wise aims for biggest new listing on LSE in bumper day for flotation plans

Money transfer firm Wise announced plans to join the London Stock Exchange in what could be the biggest UK listing so far this year.

The announcement of its intention to float followed similar announcements from four other firms looking to cash in with a stock market listing.

Bathroom retailer Victorian Plumbing; high end maternity retailer Seraphine, favoured by the Duchess of Cambridge; Dublin-based drug maker Poolbeg and cannabidiol products supplier Voyager Life all revealed plans to float on Thursday.

Initial public offerings (IPOs) have soared in recent months despite the global pandemic, with companies keen to try and win over some of the billions hoarded by investors during the Covid crisis.

According to a recent report by investment analysts at Liberum, bank deposits for private investors totalled £214 billion at the end of April, with a further 506 billion euros (£506 billion) in savings across the Eurozone.

Wise would be the first fintech business to have a direct listing on the London Stock Exchange, where the price is determined on opening day trading, rather than through a traditional book-building exercise of institutional investors via an investment bank.

Analyst Michael Hewson, of CMC Markets UK, suggests it could be the biggest IPO of the year, with an estimated value of between £5 billion and £10 billion, dwarfing Deliveroo’s £7.6 billion price tag in March.

He added: “At the company’s most recent fundraising round last summer, 319 million dollars worth of shares changed hands in a deal that put the valuation at around £3.6 billion at current exchange rates.”

Bosses said they expect details to be finalised by July 5, with the company aiming for a free float of at least 25%.

Co-founder and chief executive Kristo Kaarmann said: “Wise is used to challenging convention, and this listing is no exception.

“A direct listing allows us a cheaper and more transparent way to broaden Wise’s ownership, aligned with our mission.”

London is trying to attract more tech companies to join its leading market, with new listing rules allowing founders to retain more control over their company whilst still enjoying a profitable listing.

Deliveroo founder Will Shu said he chose London to list because it would allow him to sell a significant stake in the business whilst he retains greater shareholder voting rights for three years in the shares he still has.

Victorian Plumbing also revealed plans to join the junior AIM market later this month with a value of around £850 million. The listing is expected to raise £285.9 million for founder and chief executive Mark Radcliffe.

He said: “The overwhelmingly positive reaction to our IPO has been humbling and it is amazing to see the support and excitement around our strategic plans.”

Some analysts have suggested there could be too many IPOs coming to market currently, with some struggling following listing.

Big names to join the London Stock Exchange this year including Moonpig, Dr Martens, Virgin Wines, Trustpilot and cyber security giant Darktrace.

The majority have performed strongly, although Deliveroo famously sunk more than 30% on its opening price. Today shares remain 34% down on the 390p-a-share launch.

Made.com had its own stock market debut on Wednesday, with shares dropping 7% at points from its 200p-a-share opening price. On Thursday shares were at 199p.

By comparison, Moonpig shares started trading in February at 350p-a-pop and are at 463p today.

Darktrace listed at 250p-a-share and is now at 421.75p as of Thursday lunchtime.

David Mak, research analyst at Liberum, said: “Investing in an IPO that lists immediately before or during a period of turmoil predicates poor long-term share price performance, whilst investing in one shortly after such a period (like this year and next) provides an attractive set-up.

“We find that IPOs in the first two years after a bear market (a downturn) perform best, and that IPOs in the UK show superior long-term performance to European and US IPOs – matching or exceeding overall market returns.”