After a subdued IPO market in recent years, investors and issuers are positioning for a rebound in 2026, albeit one that is likely to be selective and influenced by macroeconomic headlines. While conditions remain differentiated by geography and sector, equity capital markets are entering the year with stronger pipelines, improved investor engagement, and greater issuer preparedness than has been evident since the post-pandemic correction.

Globally, attention is centred on the potential return of large-scale technology IPOs, while domestically the ASX appears positioned for a gradual, quality-led recovery rather than a broad-based reopening. Together, these dynamics suggest 2026 could represent an inflection point for IPO activity.

Global IPO Backdrop: Scale Drives Confidence

The global IPO market regained momentum through 2025, supported by improved equity market performance and more supportive financing conditions in parts of the market. Issuance volumes remained below long-term averages, however the quality and scale of prospective listings has improved meaningfully. This has set the foundation for a stronger 2026 pipeline.

A defining feature of the global outlook is the anticipated emergence of mega-cap technology listings. High-profile private companies operating at scale across aerospace, artificial intelligence and next-generation software are widely expected to test public markets in 2026. The significance of these transactions extends beyond headline proceeds. Large-scale IPOs tend to act as confidence catalysts, reinforcing investor risk appetite and improving sentiment across the broader primary market.

From a capital markets perspective, these potential listings signal two important shifts. First, private market stakeholders are increasingly viewing public equity as a viable platform for funding long-duration growth, rather than relying solely on private capital. Second, investors appear more willing to underwrite long-term growth narratives, particularly where businesses demonstrate scale, strategic relevance and operating leverage.

While execution risk remains, particularly around valuation expectations, the global pipeline suggests that 2026 could deliver a meaningful uplift in IPO proceeds relative to recent years, even if overall deal count remains selective.

ASX IPO Market: Recovery with Constraints

The domestic IPO environment has improved incrementally, though remains structurally different to offshore markets. The ASX continues to face challenges around scale, liquidity and the availability of large, venture-backed growth companies. As a result, the recovery is expected to be gradual rather than cyclical.

Market participants have pointed to a healthier pipeline of potential listings entering 2026, with improved engagement between issuers, advisers and institutional investors. Importantly, this pipeline is characterised by greater maturity, with companies placing increased emphasis on governance, earnings visibility and investor alignment ahead of listing.

Despite this progress, valuation discipline remains a defining feature of the market. Investors are increasingly selective, prioritising businesses with either near-term cash generation or clearly articulated paths to profitability. This dynamic has narrowed the valuation gap between issuers and the market, improving execution certainty but limiting speculative issuance.

Sectoral Drivers on the ASX

Resources are expected to remain the backbone of ASX IPO activity. Australia’s comparative advantage in natural resources, particularly in critical minerals, battery materials and diversified industrial commodities, continues to support capital formation through public markets. While commodity cycles will influence timing, resources are likely to account for a meaningful proportion of listings in 2026.

Healthcare and life sciences also appear positioned for a moderate recovery. Following a prolonged period of subdued issuance, investor interest in healthcare innovation has begun to stabilise, particularly for companies with advanced clinical assets or scalable commercial platforms. While early-stage biotech remains challenging, more mature healthcare issuers may find improved conditions this year.

Technology remains the most constrained segment of the domestic IPO market. While global sentiment towards technology has improved, the ASX continues to lack depth in large-scale, domestically grown tech businesses. That said, improved global conditions and increased openness to dual-listing structures may support selective issuance, particularly where businesses can demonstrate defensible market positions and sustainable revenue models.

Macro and Market Considerations

Interest rates remain a key variable shaping IPO conditions. Elevated discount rates over recent years have weighed on equity valuations and reduced investor tolerance for long-dated growth. In 2026, the direction and timing of monetary policy will be an important swing factor for valuation outcomes and the breadth of IPO opportunities.

Aftermarket performance is also increasingly influential. Recent experience has reinforced the importance of disciplined pricing and realistic expectations. IPOs that trade well post-listing tend to unlock follow-on issuance and improve market confidence, while weaker outcomes can quickly dampen sentiment across the pipeline.

As a result, issuers are approaching the market with greater caution, focusing on cornerstone support, tighter offer structures and clearer communication of use-of-funds and growth milestones.

In summary, while IPO markets are unlikely to return to peak levels immediately, 2026 represents a constructive step forward. The combination of global momentum and improving domestic conditions suggests equity capital markets are entering a more sustainable phase of recovery, laying the groundwork for a stronger medium-term issuance environment.