Initial Public Offerings and Venture Capital in Germany

of the listing, reporting, and disclosure requirements, with the Neuer Markt being more
demanding.

As can be seen in table 1, the huge increase in the number of IPOs, starting in 1997, stems
mainly from new firms that were listed in the new market segment. The other segments do not
show a similar increase in the number of IPOs.⁶

The Deutsche Telekom IPO and the IPO wave on the Neuer Markt are, of course, also
reflected in the yearly total IPO volumes. However, the magnitude of the increase in IPO volume
looks less dramatic if it is related to the market capitalization. Figure 1 reveals the extraordinary
position of the Deutsche Telekom IPO in 1996.⁷ It is striking that the IPO volume as percentage
of stock market capitalization raised through IPOs in 1986 exceeds that of 1998 or 1999, while
the high relative IPO volume in 2000 is primarily due to the downturn in the stock market in the
second half of 2000.

Figure 1: IPO Volume

In addition to the low number of IPOs in Germany before the IPO boom on the Neuer
Markt, the average age at the time of the listing as well as the average IPO volume are also worth
noting.

⁶ The number of IPOs on the Geregelter Markt declined as most companies opted for the Neuer Markt.

⁷ The numbers for figure 1 are taken from the DAI-Factbook 2003.

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