Tel Aviv IPO Wave Shows Signs of Slowing Amid Market Challenges

After a strong start to 2026 with 26 new companies listing on the Tel Aviv Stock Exchange, the IPO surge is beginning to lose momentum. The sharp market declines in June, combined with issuers lowering their valuation expectations and difficulties faced by new listings such as Kiso and Tambour, raise questions about whether the IPO window is closing or significantly shrinking. The first half of the year saw the largest IPO wave since 2021, with 13 companies filing prospectuses in May alone, aiming to raise around 6 billion shekels and collectively valued at approximately 30 billion shekels.

The peak of this wave was marked by Tadiran's massive real estate IPO in early June, which raised 1.7 billion shekels at an 8 billion shekel post-money valuation, the largest in over a decade. However, to complete the offering, controlling shareholders agreed to reduce the initial valuation by about 15%. Similarly, the defense company Begera lowered its valuation by nearly 25% to complete one of the year's largest IPOs, raising funds at a 3.2 billion shekel pre-money valuation. Other companies like Galam and Rustic also adjusted their valuations downward to finalize their listings.

While valuation reductions are common in IPO negotiations, this time they may indicate a closing window for new listings. June was the toughest month for the market since October 2023, with the TA-90 index dropping 11.2%, TA-125 down 9.5%, and TA-35 falling nearly 10%. This downturn, partly due to investor disillusionment following a US-Iran memorandum, cooled institutional appetite for new IPOs despite the high number of companies seeking to go public.

Several upcoming IPOs are struggling. Kiso's restaurant chain faces resistance from institutions unwilling to accept its 400 million shekel valuation, offering only about 300 million shekels. Metalicon, specializing in defense and aerospace components, initially sought 150 million shekels at a 550 million shekel valuation but now faces offers around 300-350 million shekels. Tambour, a paint manufacturer planning to raise 500 million shekels at a 2 billion shekel valuation, has delayed its IPO amid demands for significant valuation cuts due to competition and a slowdown in the construction sector.

Other real estate companies like Abisror and Avilia also face challenges attracting institutional interest. Conversely, pharmaceutical company Rafa, controlled by the Pimi fund, maintains positive valuation expectations at 2.2 billion shekels. Institutional investors note that early in the year, a fear of missing out drove broad participation in IPOs, but as the volume grew, demand for existing stocks declined, leading to more selective investment behavior. The current IPO wave is nearing its end, and if market weakness persists, the IPO window could close faster than expected, potentially causing losses for some recent listings and renewed demand for established stocks.