It was expected that Canada’s initial public offering market would be more subdued in 2019 compared to previous years, partly because of geopolitical uncertainty and concerns about the global economy. And it was.

In fact, this year saw a decade-low number of new corporate listings on the S&P/TSX Composite Index and the Venture exchange at 69, according to data from TMX Group Ltd. The largest number of new listings this decade came in 2010 at 304.

The IPO market in Canada has been softening for some time. 

“Between 1993 and 2000, there was an average of 43 IPOs on the TSX each year; and since 2000, the average has been about 15 each year,” University of Calgary finance professor Ari Pandes told BNN Bloomberg in an email.

According to Pandes, the decline can be attributed to the perception that public markets have become a “much more unpleasant place to operate in.”

Satisfying shareholders, securities regulators, proxy advisory firms and auditors becomes top priority when a company goes public, taking up too much time, and, in turn, dissuading businesses from wanting to deal with life on the stock market, Pandes said. He added quarterly earnings scrutiny is another factor increasingly concerning management teams.

In addition, the private market has become much more robust, with more appealing ways to raise capital including debt financing, according to David Wismer, head of technology investment banking at BMO Capital Markets.

The Canadian IPO story that did stand out this year came from point-of-sale business Lightspeed POS Inc., which successfully completed an initial public offering in March and saw its shares surge about 200 per cent in the first few months following the listing.

“If we had more companies like Lightspeed, we would have more successful IPOs,” Wismer said. BMO Capital Markets is one of the banks that helped lead Lightspeed’s IPO.

However, TMX Group CEO Lou Eccleston views the current landscape through a more positive lens. In a BNN Bloomberg interview on Nov. 8, he said there is too much focus on the big companies when we examine the overall IPO landscape.

“You’ve got to take a look at not just the [companies] that get the headlines, but there are a lot of smaller companies that are having successful IPOs,” he said.

As for 2020, Wismer said not to expect a significant increase in Canadian IPO activity.

“There are expectations for decent economic performance next year and we are now on a path to less uncertainty, which bodes well for companies wanting to access the public market, but there won’t be more than a couple notable IPOs next year,” he said. While not worrisome now, Wismer noted that he would be concerned if we do not see an uptick in Canadian IPOs in a couple of years.

With that in mind, here’s a look back at the most valuable Canadian companies over the past decade since going public (based on market capitalization).


Market capitalization: $60.12 billion

When you think of e-commerce companies, Inc. is typically the player that comes to mind. But this decade, we saw the rise of Shopify Inc., which went public in 2015 and has surged nearly 1,300 per cent since doing so. The company now powers around a million merchants, supporting $183 billion in global economic activity.

Analysts are not particularly shocked by the company’s success.

“Tobi [Lutke] and his team hit on something the e-commerce market was missing, and created a new platform that is easily scalable and affordable,” Wedbush analyst Ygal Arounian told BNN Bloomberg, in reference to Shopify’s CEO and co-founder.

“Shopify is almost in a class by itself when it comes to living up to its potential to disrupt the market by empowering not only small-to-medium sized businesses, but increasingly large brands to exploit the e-commerce market opportunity,” added Tom Forte, senior research analyst at D.A. Davidson & Co.

Shopify even attracted social media star Kylie Jenner, managing her cosmetic company Kylie Cosmetics and hosting her website.

A couple things to watch in 2020 include the rollout of the Shopify Fulfillment Network and the launch of Shopify Plus, the e-commerce platform’s enterprise business meant for larger stores and brands.


Market capitalization: $15.04B

One of North America’s largest electric utility companies went public in November 2015,  and was the largest IPO in Canada since 2000. Hydro One Ltd., which is about 47 per cent owned by the Ontario government, experienced a steady decline from 2016 onward, but has surged this year. In the third quarter, Hydro One’s profit was up from the same time last year – $241 million in 2019 compared to $193 million in 2018.

The company has had growth challenges, however. When Hydro One was partly privatized by the Wynne government, the intention was to expand through acquisition. Hydro One took a significant hit when its $6.7-billion deal to buy Washington’s Avista Corp. was rejected by Washington State regulators last year amid concerns about provincial political interference.  

In November, Hydro One said that it would roll back its plan to acquire utilities across North America, and instead focus on its home base of Ontario.

Veritas Investment Research analyst Darryl McCoubrey is optimistic about the company’s outlook.

“With a new CEO prioritizing organic value accretion over M&A, sentiment is improving,” says McCoubrey who has a ‘buy’ rating on the stock.


Market capitalization: $9.59 billion

Frequent shopper at Loblaws? You may not realize that many of these grocery stores across the country are owned by Choice Properties REIT. It is one of Canada’s largest REITs with a portfolio of 726 properties and was also the largest IPO on the TSX in 2013.

“Choice is well-positioned for stable cash flow growth for the foreseeable future, along with accretion from completing development projects,” said Canaccord Genuity analyst Mark Rothschild

One concern Rothschild has, however, is around property valuations, particularly if long-term interest rates rise.


Market capitalization: $4.80 billion

According to the TMX Group, 20 per cent of the Canadian companies that went public over the past decade were from the mining sector, including Ivanhoe Mines Ltd., which made its public debut in October 2012. The copper miner is focused on three projects in southern Africa: the Kamoa-Kakula copper discovery in the Democratic Republic of Congo (DRC); the Kipushi zinc-copper-germanium-silver mine, also in DRC; and the Platreef platinum-palladium-nickel-copper-gold discovery in South Africa.

In 2016, the Vancouver-based company said that it had received unsolicited interest in the business and its projects from mining industry participants from around the world. Last year, the miner announced it was in strategic discussions with other mining companies over its assets.

Ivanhoe Mines has been the subject of controversy as well. In 2015, The Globe and Mail reported the company engaged in “hardball tactics” to obtain the necessary permits for its Platreef mine. Ivanhoe Mines responded in an open letter saying that the claims were false.

In June, Lars-Eric Johansson retired as chief executive officer after 12 years. He led the company through its IPO.


Market capitalization: $4.04 billion

This wind and hydroelectric company was spun out from TransAlta Corp. in 2013. The goal was to provide a source of capital for funding growth in renewables, which would in turn boost both companies. TransAlta Renewables owns and operates 13 hydro facilities, 19 wind farms, and one gas plant in Canada and holds interests in projects in the U.S. and Australia.

“TransAlta timed the transaction well, capturing income-focused investors willing to bet on it as an investment grade sponsor of [TransAlta Renewables],” Veritas’ McCoubrey said in an email interview with BNN Bloomberg.

Since going public in 2013, shares are up around 50 per cent.

“Investment demand for low-risk income is the primary reason TransAlta Renewables has outperformed since its IPO,” McCoubrey said.

He believes the company’s shares would have performed even better if it was not for a contractual conflict in Australia and sponsor TransAlta’s persistent de-leveraging efforts.