Turkey’s IPO Market Surges Ahead, Eyeing Record Highs in 2024

As 2024 unfolds, Borsa Istanbul remains in the throes of an IPO frenzy, poised to eclipse the record highs of the previous year. With nine companies already going public and a growing list awaiting approval, equity investment has emerged as the preferred hedge against inflation for Turkish retail investors, drawn by the lure of robust returns from the market’s newcomers.

Investing in newly listed shares has gained significant popularity, with investors flocking to equities as a means of safeguarding against economic heat. Despite certain regulatory measures aimed at tempering the rush, the appetite among local retail investors has swelled since the beginning of 2014, bolstered by the above-index returns of the newly floated shares.

Turkey’s IPO market is not only thriving; it has become a standout in the emerging markets, in stark contrast to the lull in new listings witnessed across major stock exchanges from the U.S. to Europe and China.

With rising interest rates aimed to curb the galloping inflation, Turkish credit-starved companies turned to the domestic retail investor base, which has grown more prominent amidst dwindling institutional investor participation.

In 2023, 55 companies ventured into the Turkish public market, marshaling almost USD 3.3bn from an expansive pool of 124 million investors. This surpasses all previous years in terms of both the number of listings and the value in US dollars, as well as in local currency, in records dating back to 2000.

Acknowledging the robust pipeline, the Capital Markets Board tightened listing regulations to ensure market absorption capacity. It raised the thresholds for turnover and assets size since the beginning of 2024, but this condition will not be applied to companies that applied before that period. The change was anticipated spurring surge in last year’s applications, potentially leading to a delayed deceleration in new listings this year. 

To streamline the path to going public, especially for companies poised for growth, the Turkish regulator carved out sector-specific advantages. The recent easing of pre-listing conditions for sectors like technology, renewable energy, petrochemicals, agriculture, defense, and digital transformation is set to galvanize their entry into the public sphere. The regulatory recalibration are designed to lower entry barriers for these critical industries, thereby setting the stage for sustained outperformance as Turkey’s IPO index continues to ride high.

By Velizar Velikov, Head of M&A Database at EMIS

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