London attracts three £1bn-plus listings in a month as City declares ‘the drought is over’

The London Stock Exchange has hosted three flotations valued at more than £1bn in the space of a month, the strongest run of new listings since 2021, prompting bankers to declare that the long drought in the City’s capital markets is ending.

Caledonia Renewables, an Aberdeen-based owner of offshore wind and battery assets, began trading on Wednesday after raising £1.3bn at a valuation of £4.1bn, with its shares closing the first day 6% higher. It follows Orbital Logistics, a Midlands parcel and warehousing group, which raised £1.2bn in September, and Meadowsweet Foods, a Yorkshire maker of ready meals and plant-based products, which listed last week at a value of £2.2bn.

The three deals have raised £3.4bn between them, more than the entire London market managed in 2023 and 2024 combined. Bankers said a pipeline of a further eight companies, including a challenger bank and a defence electronics group, was preparing to list before Easter.

“The drought is over,” said Victoria Lamb, head of UK equity capital markets at the investment bank Harcourt Sterling. “Two years ago every founder we met wanted to go to New York. What has changed is that the American market has become more expensive, the pound has settled, and three companies have proved you can raise serious money here and trade up afterwards. Nothing persuades a board like a chart that goes up.”

The revival follows a series of changes designed to make London more attractive, including simplified listing rules introduced in 2024, a cut in stamp duty on share trading for newly listed companies and the pensions industry’s pledge to invest more in UK equities. Bankers also point to a cheaper market: London-listed companies trade on an average of 12 times earnings against 21 in New York, which has drawn buyers who believe the gap will narrow.

The flotations are not without scepticism. Orbital Logistics is trading 4% below its issue price after a weaker than expected trading update, and analysts noted that all three companies sold a relatively small proportion of their shares, with private equity owners retaining control. Dr Tobias Wren, a finance lecturer at Bayes Business School, said: “Three deals is a good month, not a recovery. The test is whether a mid-sized technology company chooses London over Nasdaq next year. That has not happened yet.”

The exchange has lost about 60 companies to takeovers, delistings and moves abroad since the start of 2025, and the total value of the London market remains below its 2021 peak. But the chief executive of one of this month’s newly listed companies, who asked not to be named ahead of a results announcement, said the decision to float in London had been “easier than I expected”. “We are a British business with British customers,” he said. “The investors who understand us are here.”

The Treasury said the listings were “a vote of confidence in the UK” and that further reforms to encourage retail investors to buy shares would be announced in the budget.