AIM: IPOs on London’s junior market stayed at rock bottom

London: The AIM market is really struggling right now. It’s been a tough time for companies looking to go public. Last year, only 11 IPOs happened, which is the same as 2023 and even lower than during the 2008 financial crisis.

Even though the money raised from these IPOs went up from £48 million to £119 million, it’s still way below what we used to see. To put it in perspective, last year’s total was just a tiny fraction—only 2%—of the £6.6 billion raised back in 2006/7.

Things aren’t looking great for secondary funding either. It dropped by 33% to £1.2 billion in the first eight months of the year compared to £6 billion in 2021. More companies are either delisting or moving to the main London Stock Exchange, which means the number of stocks on AIM is slowly shrinking.

By the end of 2024, there were only 688 companies left on AIM, the lowest in 23 years. That’s a big drop from nearly 1,700 back in 2007. Investors are pulling out billions, making it tougher for firms to raise cash like they used to. Plus, high fees are making bosses think twice about listing.

Colin Wright from UHY Hacker Young pointed out that there’s a lot of red tape and reporting that smaller companies can avoid by staying private. He believes that if AIM wants to stay competitive, there needs to be a serious chat about cutting down on this red tape. Most experts agree that a lively stock market for smaller companies is crucial for a growing economy.