Royal Bank of Canada’s capital-markets division rose to become the top arranger of initial public offerings in the nation during 2021, reclaiming the title as surging equity markets fueled a record year for new stock issuances.

Canadian companies undertook 173 IPOs with a total value of $11.9 billion (US$9.3 billion), according to data compiled by Bloomberg. That tops the previous record of $8.24 billion set in 2006. Drivers included a government stimulus-aided economic rebound amid the COVID crisis and record low interest rates that combined to spur a 22 per cent jump in the S&P/TSX Composite Index.

RBC Capital Markets managed 17 deals for a total value of $1.35 billion, with offerings spanning the insurance, real estate and technology industries, among others. That helped the bank unseat Canaccord Genuity Group Inc., which had been Canada’s top IPO arranger for the past two years. RBC Capital Markets last led the Canadian IPO league tables in 2017.

“The markets were perfectly placed for IPOs,” Nitin Babbar, RBC Capital Markets’ global co-head of equity capital markets for Canada, said in a December interview. “We have incredibly low rates, an investor appetite for new names and new exposures, coupled with a number of issuers who had been monitoring the IPO markets and were able to move quickly to get ready and come to market.”


Top Canadian IPO Managers for 2021

Rank Manager Volume Issues Market Share
1 RBC Capital Markets   $1.35 billion    17 11.2%
2 BMO Capital Markets   $1.27 billion    12 10.5% 
3 Scotiabank   $1.22 billion   13 10.1%  
 4  TD Securities  $1.1 billion   10  9.1% 
 5 CIBC $811.6 million   8 6.7%  



The record tallies were also bolstered by rare large deals like Telus International CDA Inc.’s US$1.06 billion offering and a US$1.29 billion IPO by Definity Financial Corp., which operates Economical Insurance. The Definity deal was the third-largest Canadian IPO announced in the past five years and one of the 10 largest in the country’s history.

BMO Capital Markets pitched and won the mandate for Definity about 12 years ago, and while the strong equity markets helped the deal, it was mostly chance that everything happened to come together in 2021, said Peter Miller, head of equity capital markets. The unit of Bank of Montreal was the No. 2 Canadian IPO arranger last year, with 12 deals valued at $1.27 billion.

“When we started the year, we knew it was going to be a solid year, but we didn’t know it was going to be a historic year,” Miller said in an interview. “Some of that is market-driven. Some of it is just serendipity, like Definity.”

The conditions that powered the record performance -- including low interest rates and buy-side funds flush with capital -- are largely still current and should fuel continued strength, Miller said. Canada may also see more offerings from industrial companies, he said.

Technology companies accounted for a large percentage of 2021 offerings and “that theme is in place as we move into 2022,” said Jake Lawrence, head of global banking and markets for Bank of Nova Scotia. The continued strength in technology and the broadening spectrum of companies coming to market may fuel another strong year for IPOs, he said.

“Our IPO pipeline actually continues to be quite robust,” Lawrence said. “It’s comprised of different sectors and different sizes -- it’s quite diversified at this stage.”

While the disruption of the pandemic accelerated many tech companies’ growth, the industry is now structurally a larger part of the Canadian market, a trend that should persist even if current market conditions fade, said Sante Corona, head of equity capital markets for Toronto-Dominion Bank’s TD Securities.

“We have an incredible ecosystem of technology companies that have really matured over the last couple of years,” Corona said. “They’re very high-quality, and there’s even more of them than we thought there were.”


Top Equity Sales Advisers in Canada for 2021

Rank Adviser Volume Issues Market share
1 BMO Capital Markets   $6.5 billion 85  12.1% 
2 Canaccord   $5.1 billion 171  9.4% 
3 RBC Capital Markets  $4.42 billion   59 8.2% 
4 Scotiabank   $4.3 billion  58  8% 
 5 TD Securities  $3.99 billion  43  7.4% 



An expected increase in interest rates in 2022 threatens to remove a driver of the IPO surge. Still, they are unlikely to knock solid IPO candidates out of the running, said Tyler Swan, head of equity capital markets for Canadian Imperial Bank of Commerce’s CIBC Capital Markets.

“IPO markets are fairly sensitive to broader equity market conditions, and certainly right now equity markets are wrestling with omicron, with the pending withdrawal of monetary stimulus and with higher inflation readings,” Swan said. “Having said that, if you go back in time, good companies pursuing IPOs usually find a window.”

Canada also posted a record year for equity and equity-linked sales in 2021, with 775 deals totaling $55.8 billion. That gain was fueled by many of the factors that drove IPOs, as well as a record level of acquisitions, which prompt companies to sell equity for financing. 

The strong M&A market looks set to continue in 2022, and strong corporate earnings, as well as a Canadian market that’s undervalued compared with the U.S., should result in strong equity sales, said Chris Blackwell, head of Canadian investment banking at Canaccord.

“We’re definitely going to continue to see some choppiness in the market in the new year, but for good companies, there will be a market,” Blackwell said. “It’s just going to have to be a little bit more targeted and thoughtful in terms of the timing and the approach.”