German IPO market remains challenging in 2024 - signs of recovery in 2025

The latest IPO study by Kirchhoff Consult shows: The market for IPOs in Germany remains tense. With four IPOs - one more than in the previous year - the German Prime Standard recorded a slight increase. However, after €1.9 billion in 2023, the total issue volume in 2024 was only €1.5 billion, the second-lowest figure in the last ten years. At 889 million euros, significantly more than half of the issue volume was attributable to the largest IPO of the year (Douglas AG).

‘Investors continue to be cautious, which is also due to the negative price developments of numerous new issues. Nevertheless, the stock exchange remains a central platform for long-term growth capital,’ says Jens Hecht, CFA, Managing Partner at Kirchhoff Consult. ‘We expect the IPO market to pick up significantly in 2025.’

IPO market 2024: Cautious optimism with increasing market volatility 

After an optimistic start to the year, a weak economy combined with geopolitical tensions led to increased market uncertainty. Nevertheless, the DAX benefited from the stabilising global economy and monetary easing. This led to it exceeding the 20,000-point mark for the first time in early December 2024. However, the price performance of new stock market entrants remained disappointing. Three out of four new issues were trading in the red by the end of November. Springer Nature AG & Co. KGaA was an exception with a price increase of just under 9 per cent.

SME bonds: Second-lowest issue volume in ten years

The market for SME bonds declined in 2024: the placement volume fell by 31 per cent to 707 million euros. While the renewable energy sector once again dominated, the share of the property sector continued to decline. On a positive note, the rising share of full placements was significantly higher than in the previous year at 55.6 per cent.

IPO outlook 2025: Increasing potential despite uncertainties

After the challenges of recent years, the picture for 2025 is more optimistic: Kirchhoff Consult expects a significant revival of the IPO market with 8 to 10 IPOs in the Prime Standard. Potential candidates include the energy start-up 1Komma5° and the Berlin-based fintech Raisin, which could enter the capital market. Companies from forward-looking sectors such as technology and energy in particular could benefit from an improved market environment.

Despite attractive valuations, the environment remains challenging. Geopolitical uncertainties, the economic impact of decisions by the new US government and the continuing trend towards alternative financing options such as private equity could influence the timing and number of IPOs. In addition, regulatory requirements are making it more difficult for SMEs to go public.

Nevertheless, the general conditions are expected to improve overall: Stabilised inflation, a continued supportive monetary policy from the European Central Bank and a growing interest in technology-based business models could have a positive impact on the number of IPOs.

Jens Hecht, CFA, Managing Partner of Kirchhoff Consult GmbH adds: ‘Despite uncertainties, the markets continue to offer attractive valuations. We expect 8 to 10 IPOs in the Prime Standard in 2025. However, in order to realise the actual potential of up to 50 IPOs per year, greater promotion of the equity culture and fewer regulatory hurdles for SMEs are required in Germany.’

You can find the complete study here.