EMEA IPO markets faced challenges at the start of 2026 due to geopolitical tensions and AI-related sell-offs, yet overall IPO proceeds grew, driven largely by the defence sector’s strong performance.

Defense to the rescue

Stockbrokers and investors started 2026 in high spirits, anticipating a rally in IPO activity in the first half. But geopolitical uncertainty and AI disruption cooled that optimism. British roadside assistance company RAC and software group Visma are among the IPO candidates to put listing plans on hold.

Despite these challenges , EMEA IPO proceeds closed Q1 2026 up 30% year-on-year at $7.4 billion, according to PwC.

The defense sector deserves much of the credit for the uptick. In Europe, defense industry business accounted for three of the five biggest IPOs in the first quarter, led by ammunition manufacturer CSG. The Czech-based company secured proceeds of €3.8 billion (more than half of the full EMEA total) and a market cap of €25 billion from its January listing in Amsterdam.

In other European defense stock flotations, submarine components manufacturer Gabler Group and defense contractor Vincorion listed in Frankfurt, and subsea surveillance technology business General Oceans debuted on the Oslo Stock Exchange.

The European defense industry is one of the few sectors to benefit from the conflicts in Ukraine and now Iran. The STOXX Europe Total Market Aerospace & Defence Index was showing 12-month gains of around 15% in early May, and Britain’s BAE Systems and Germany’s Hensoldt and TKMS are reporting record order books.

European governments are increasing defense budgets in response to escalating security risks and US threats to withdraw from the NATO alliance. European countries increased defense spending by 14% in 2025, according to the Stockholm International Peace Research Institute, and the European Commission has outlined plans to unlock more than €800 billion in defense investment by 2030 through its ReArm program.

The prospect of sustained defence spending growth is encouraging a new pipeline of potential listings. German tank maker KNDS is targeting an €20 billion IPO later this year and Britain’s Doncasters Group, a metal engineer supplying the aerospace sector, is also mulling a listing. 

Options open

Companies in other sectors, however, are keeping their IPO options open, despite market turbulence.

Mark Moffat, the chief executive of software company IFS, says an IPO in 2027 or 2028 is firmly in the company’s plans. The business’s technology deploys AI in manufacturing processes, providing some protection against valuation falls that have impacted other software companies.

UK-based car windscreen repairer Belron is also moving forward with listing plans.  The business has yet to appoint underwriting banks, but an Amsterdam IPO is penciled in for the months ahead. The company’s shareholders D’Ieteren Group, a Belgian corporate, and private equity firm Clayton Dubilier & Rice are targeting a valuation in excess of €30 billion. European veterinary group IVC Evidensia, backed by buyout firm EQT, is another business that may push ahead with listing plans this year.

Defense groups are currently driving EMEA IPO activity, but companies across multiple sectors continue to position themselves for a reopening of equity capital markets.

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