Latin America saw limited IPO activity in 2024 and, with interest rates in the key Brazilian economy remaining elevated and uncertainty surrounding US trade tariffs on imports from Mexico, IPOs face ongoing headwinds.

Only five companies proceeded with listings on Latin American exchanges in 2024, securing US$28 million in IPO proceeds, down from US$366 million in IPO proceeds in 2023 from five listings. IPO figures for the past three years have dropped significantly after a bumper 2021 when 52 companies listed in the region and raised US$16.26 billion in IPO proceeds. Activity levels have also declined significantly from pre-pandemic levels.

View full image: Latin America IPO deal value and market value, 2018 – 2024 (PDF)

View full image: Latin America IPO count, 2018 – 2024 (PDF)

Although activity levels across the region have been muted and broader market conditions are expected to remain challenging, Latin America will present investors who understand the region and are able to manage risk with compelling investment opportunities.

High quality companies

Despite macroeconomic and geopolitical complexities, Latin America offers investors the opportunity to invest in resilient, high-quality companies.

For example, Peruvian healthcare group Auna landed a successful US IPO in 2024, securing proceeds of US$360 million, while Mexican discount retailer BBB Foods also successfully listed on the New York Stock Exchange last year, securing IPO proceeds of US$677 million, and trading well immediately following its IPO. BBB Foods raised an additional US$593 million in a follow-on offering in Q1 2025.

There is a pipeline of similar IPOs candidates. According to Bloomberg, fast-growing online grocery delivery business Rappi, a market leader in the US$272 billion Latin American e-commerce market, is considering a 2025 US IPO.

Pockets of potential activity

Although many attractive Latin American companies have turned to the US to pursue their IPO ambitions, there is also potential for select domestic stock exchanges to perform well this year.

Argentina is one potential bright spot, as the country's administration drives through an ambitious package of market-friendly reforms to stabilize government finances and stimulate private sector investment. Notably, Argentina's Merval stock exchange index delivered major gains after Javier Gerardo Milei came into office. As a result of the policy pivot, the country has reported its first budget surplus in 14 years and rampant inflation has fallen to a five-year low.

Improving macroeconomic indicators have put domestic IPOs in Argentina back on the table. In 2024, natural gas distribution company Distribuidora de Gas del Centro became the first company in more than six years to list stock in Argentina, according to the Buenos Aires Times, with oil driller Petrolera Aconcagua Energia, another candidate for a domestic IPO, seeking financing for its expansion.

Milei's reform program will face its first big electoral test when Argentina holds its mid-term legislative elections in October. In the meantime, his administration continues to forge ahead with a campaign to privatize state-owned companies, ordering government officials to speed up plans to privatize more than 50 state companies, including Aerolíneas Argentinas (airline), Energía Argentina S.A. (energy company), Intercargo Sau (transportation services), Agua y Saneamientos Argentinos S.A. (water and sewer services), Belgrano Cargas y Logística S.A. (railway company), Sociedad Operadora Ferroviaria S.E. (Sofse, railway company) and Corredores Viales S.A. (infrastructure and traffic management).

What's next for Brazil and Mexico

Overall, Latin American IPO activity will require the Brazilian IPO market to show gains in 2025. The region's biggest economy has not seen an IPO since 2021, when digital bank Nubank completed a US$2.6 billion IPO with a listing on the NYSE. Since then, the Brazilian IPO market has been impacted by rising interest rates in the US and Europe, and a closely contested presidential election that saw Luiz Inácio Lula da Silva elected for a third term in office.

Interest rates in the US and Europe have started coming down and domestic politics have stabilized, but Brazil has still not had any IPOs even though there is a cohort of companies, particularly in the water and energy sectors, that would make for successful IPO candidates.

The year ahead could see the end of this dry spell, but investors will have to navigate stubbornly high inflation in Brazil, which has constrained the ability of Brazil's central bank to bring down local interest rates.

Mexico, another key regional market, will present similar complexities. The country's IPO market should benefit from falling interest rates, and newly elected President Claudia Sheinbaum is seen as pro-business.

However, the new US administration's tariff policy could pose challenges for the Mexican economy. Mexico is the largest exporter to the US, with Fitch putting its 2024 exports to the US at more than US$500 billion—equivalent to 28 percent of Mexican GDP. The US has imposed and then rescinded tariffs on Mexican goods in Q1 2025. This will give investors reasons to hesitate, with implications for near-term IPO prospects.

For IPO investors, government regulation, economic policy positions and US relations will determine which Latin American jurisdictions present the most attractive investment prospects.

Analyzing IPO candidates when the macroeconomic and geopolitical landscape is so fluid will be challenging and present risk, but for investors with local insight and the ability to price risk accurately, there are high-quality companies across the region to support.

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