Cable operator Tele Columbus [ESCALC.UL] became the latest German company to announce plans to float shares as the country's traditionally risk-averse companies warm to capital markets after Alibaba's record-breaking $25 billion listing.
Encouraged by the reception of the Chinese e-commerce giant's U.S. initial public offering (IPO) and by rising confidence in the economy, companies such online fashion retailer Zalando and start-up firm Rocket Internet are breathing even more life into equity markets, where volumes are at a seven-year high globally.
"We currently have a great window for IPOs. Markets are very liquid, the ECB is helping through its quantitative easing policy, the U.S. economy is showing strong growth," said Klaus Froehlich, who heads Morgan Stanley's equity capital markets business in Germany and Austria.
"For anyone who has done their homework now is the time to go to market and list."
Consulting firm Ernst and Young [ERNY.UL] estimates that up to 20 companies may list shares on Deutsche Boerse this year, more than twice as much as last year.
Proceeds from listings in Germany, including Rocket Internet, will reach roughly the level of the 3.5 billion euros ($4.41 bln) in issuance for the whole of 2013, Deutsche Boerse data showed.
Analysts said Germany's "Mittelstand", small-to-medium sized companies, often family-owned or backed by sponsors, have traditionally been more wary of capital markets, but are showing signs they are more ready to turn to equity financing.
Zalando late on Monday priced its shares at 21.50 euros ($27.08) each late on Monday, setting Europe's biggest online fashion retailer to fetch 605 million euros.
Meanwhile Rocket Internet, Zalando's top investor, will become the ninth company to float in Germany this year. It expects to raise as much as 1.6 billion euros.
That would be the biggest German IPO since car engine maker Tognum floated in 2007, the year Rocket Internet was founded by the Samwer brothers, Oliver, Alexander and Marc.
Since then they have set up e-commerce sites and online marketplaces for everything from taxis to meal deliveries in more than 100 countries. Its firms made about $1 billion in sales last year.
In a further sign of confidence in Germany's equity markets, U.S. private equity firm Lone Star has said it planned to float its eastern German property company TLG Immobilien, and the owners of classified advertising group Scout24 are also exploring an IPO.
A surge in deals across Europe is also helping sentiment.
European IPO issuance is up 260 percent this year to $54.8 billion, while global IPO volumes almost doubled to $176 billion so far this year, Thomson Reuters data show, marking the highest first-nine month total since 2007.
TREASURE HUNT
Zalando priced its shares close to the upper end of its 18-22.50 euro range, showing healthy appetite for still-rare European Internet offerings.
"The Zalando IPO has attracted strong demand because their management team is convincing, they're only listing a small part of the company and if you're looking for a European online play, there are not that many companies apart from Zalando," said Cantor Fitzgerald retail analyst Freddie George.
But he said potential Zalando investors should heed the fortunes British rival ASOS, a former stock market high-flyer whose stock has fallen 70 percent since February.
"I feel that people are maybe being a little bit naive. They are similar to ASOS," said George.
Investors say that while Zalando has the merit of a market-leading position in its own sector, it still faces competition from older rivals who sell from stores as well as on the Internet.
Andrea Williams, European equities fund manager at Royal London Asset Management, said: "It's a difficult space to get right, in terms of pitching it right and competing against retailers already on the ground."
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