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Brazil IPO Market Sets New Standard

Low interest rates, an economic rebound from the COVID-19 pandemic and high levels of interest in the local money management industry across the country have led to a record year for the initial public offering (IPO) market in Brazil — and there’s still almost one-third of the year to go.

Brazilian companies have raised more than $11 billion (57 billion reais) through 42 listings, according to a Bloomberg report. That’s already higher than Brazil’s record for a full year of 53.6 billion reias on 60 IPO deals, which was set in 2007.

Stock for Raizen SA, which is backed by Royal Dutch Shell Plc and Cosan SA, will begin trading on Thursday (Aug. 5), putting 2021 at the top of the list. Overall, the number of IPOs in Brazil is up more than 400 percent compared to one year ago, outpacing the U.S. increase of 110 percent in IPOs, according to the report.

More than 20 Brazilian firms are getting ready to offer IPOs, with Oncoclinicas, a medical care provider owned by Goldman Sachs, scheduled to price its offering on Friday (Aug. 6).

Brazil is seeing a flurry of mergers and acquisitions, with deals nearly quadrupling to $34 billion since last year, Bloomberg News reported in June.

Related news: Brazil Sees Merger Mania As Deals Jump To $34 Billion

Meanwhile, stock issuance by companies in Brazil leaped 83 percent to 69.6 reais, or $13.6 billion, with firms raising capital in public equity markets and seeking out targets for takeover.

What’s happening in Brazil is part of a record wave of mergers and acquisitions around the world. As PYMNTS previously reported, this trend stems from low interest rates, rising stock prices and an uptick in interest in sectors that performed well during the COVID pandemic. $532 billion in deals were announced in May, the most ever for that month.

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