Latin America’s capital raising is driven primarily by domestic companies going public. H1 2017 showed recovery from 2016, with the largest capital raising and number of IPOs since H1 2013, raising USD 2.2 billion from six deals. Latin America’s capital raised by IPOs increased by 845% in the first half of 2017. The total amount raised in H1 2017 has surpassed the amount of capital raised in full years 2014, 2015 and 2016.

Equity is becoming more attractive in the region and represents 14% of total capital raised YTD 2017, up from 4% in the same period of 2016.

While there were no cross-border IPOs listed in stock exchanges based in Latin America, the region’s domestic listings were at their highest levels in four years, with Mexico and Brazil taking the lion share of activity.

2017 is the year that companies that previously postponed attempts at going public are giving it another go. Netshoes, Azul and Becle are among these companies.

Netshoes, a leading Brazilian online retailer raised USD 149 million, listing on the New York Stock Exchange. This company first considered an IPO over four years ago. Azul, the Brazilian airline, had previously abandoned their IPO twice. Becle SAB de CV, the largest tequila maker in Mexico, went public in the first half of 2017, having previously delayed its plans twice due to the record low value of the Mexican peso. The company, which listed in February on the Mexican Stock Exchange, raised USD 910 million and is the largest IPO from a Mexican company over the last six years. The company’s shares jumped more than eight percent on first day of trading.
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“Activity in the region is less down to “regional” themes – more to the individual companies needs to list. Equity listings remain a risky proposition in Latin America, so only larger companies are willing to take the risk. It’s an open question why IPOs are not more frequent – valuations can be uncertain, investors bases relatively shallow and the number of large companies is not as high as it could be. Cross‑border deals into North America or beyond, are fairly cumbersome for smaller companies, in terms of regulation so those that do proceed with an IPO also look at domestic markets first.”
Pablo Berckholtz Head of Capital Markets in Latin America at Baker McKenzie
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