Toronto Stock Exchange Has Gone A Year Without An IPO

It has now been an entire year since there has been an initial public offering (IPO) in Canada.

The Toronto Stock Exchange has not seen a new listing since Lithium Royalty Corp. (LIRC) went public in March 2023, raising $150 million from the share offer.

Lithium Royalty’s stock has since plunged 54% and now trades at $7.35 per share.

Most analysts on Bay Street say they don’t see a recovery in Canada’s IPO market before the second half of this year, at the earliest.

The lack of new listings comes as the U.S. IPO market begins to heat up again and is raising concerns about the health of Canada’s equity markets as a place for companies to raise capital.

Already this year, companies have raised $7.2 billion U.S. via IPOs on American stock exchanges, with Amer Sports (AS) $1.6 billion U.S. offering and healthcare firm BrightSpring’s (BTSG) $693 million U.S. listing among the biggest debuts in recent months.

Other U.S. companies, such as social media giant Reddit, are now preparing to hold multi-billion-dollar IPOs in America this year.

Analysts blame a lack of diversification and scant technology companies for the lack of new listings in Canada, noting that the Toronto Stock Exchange remains heavily weighted towards mining companies and banks.

Technology stocks currently comprise 8.6% of the Toronto Stock Exchange compared with a 30% weighting in the benchmark S&P 500 index in the U.S.

For its part, the Toronto Stock Exchange has said that the IPO market in Canada will be resurrected once economic conditions improve, i.e. lower interest rates.

However, there appear to be no listings currently planned for the Canadian market.

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