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I-P-Oh-la-la—will it be a bumper year for private offerings in France?

France’s IPO market may have momentarily lost its joie de vivre towards the end of the first half of 2021, but it had already gone through an exceptional start to the year. A few closely watched listings were shelved in June and July as investors digested a strong slate of offerings in the preceding months.

There have already been at least 24 listings in France in 2021, raising €2.1 billion in total according to Dealogic. This year is on track to be one of the top ECM vintages in France, reminiscent of the highs of 2014 and 2015, in which there were 27 IPOs worth a total of €4.5 billion, and 27 IPOs worth a total €5.1 billion, respectively.

The Paris Euronext had already been experiencing a dry patch prior to the pandemic, the crisis inevitably all but shuttering the stock exchange. In 2020, France saw eight listings worth a mere €494 million.

Wibble wobble

Despite the comeback seen in the first half, wobbles were seen in June as investors grew more sceptical of growth stocks, which are especially sensitive to inflation and interest rate fears given their speculative discounted cash-flow valuations.

Music firm Believe successfully raised €300 million in its IPO in mid-June, but this was 40% less than initially intended and the offering was priced at the bottom of its range. The company's share price then spent its first month in decline, shedding more than 20% of its value before recovering losses.

The same month, used-car sales platform AramisAuto raised €250 million, its share price meeting a similar fate. This was enough for Bain Capital-backed car-parts seller Parts Holding Europe to park its €450 million offering, citing unfavourable market conditions. Shortly thereafter, parcel delivery company Colis Privé postponed its IPO.

Back to black

Investors may have grown more discerning, but now it seems that it's game on once again. Not only did the CAC 40 regain its buoyancy in the second half of July, providing baseline support for market debutants, but there is a host of attractive assets being primed for sale.

The most-awaited Parisian listings are in the high-growth tech and healthcare spaces. They include cloud provider OVH, which has contemplated an IPO since 2018, real estate company Icade’s healthcare subsidiary Icade Santé, and Permira-backed cybersecurity specialist Exclusive Networks. Supermarket chain Casino also indicated its intention to list its green energy business GreenYellow earlier this year, which looks sure to benefit from investors' seemingly bottomless appetite for anything with an ESG theme.

Following the vacances d'été, France's IPO market has every chance of finishing 2021 on a high not seen for years.