What is a Euronext Growth IPO?
An IPO (Initial Public Offering) on Euronext Growth is the transaction by which an unlisted European company opens its capital to the public for the first time. It issues new shares (a capital increase) or sells existing shares belonging to the founding shareholders, or both at once.
Euronext Growth hosts between 15 and 40 new listings a year depending on market conditions. In a favourable market (2020-2021), that number can exceed 50. In a correction or a high-rate environment (2022-2023, 2025), it can fall below 10.
The Euronext Growth IPO process
Preparation (3–9 months before)
The company selects a Listing Sponsor (a bank or advisory firm), prepares the admission document, has its accounts audited by a statutory auditor, and sets its valuation range with the sponsor.
Announcement and admission document
The company publishes its admission document on its own website and on Euronext's. This document details the business, the accounts over 2 to 3 years, the risk factors, the use of the funds raised and the target valuation. It is essential reading before any subscription.
Subscription period (5–10 days)
Investors place their subscription orders with their broker. The order states the number of shares wanted at the fixed price. Most online brokers allow subscription through the usual interface.
Allocation and first trade
If the deal is oversubscribed (demand exceeds supply), shares are allocated pro rata or by lottery. The first quoted price is set during a price-setting auction.
Lock-up period (3–6 months)
Founding and legacy shareholders generally undertake not to sell their shares during a so-called lock-up period. When this period expires, selling pressure on the price is possible — something to watch.
The risks specific to small-cap IPOs
Warning: Academic research (Ritter, 1991; Loughran & Ritter, 1995) shows that IPOs underperform the market on average over the 3 to 5 years after the listing. On Euronext Growth, this tendency is amplified by low post-listing liquidity and the usual optimism of IPO valuations.
The offer valuation is often optimistic
The Listing Sponsor and the company have a shared interest in presenting the financial projections in their best light during an IPO. The business plans shown to investors are systematically based on central or optimistic scenarios. The operational reality of the following 12 to 24 months is often more modest.
The absence of a listed track record
A company going public has never had to manage the expectations of public markets. The discipline of financial communication, managing results against estimates, the relationship with minority shareholders — all of this is learned after the listing. Early disappointments are common.
Post-listing illiquidity
If the IPO free float is small (a minimum of €2.5M on Euronext Growth), the stock's liquidity can stay anaemic for months. An investor who wants to exit quickly after a disappointment can find themselves trapped.
Checklist before subscribing to a Euronext Growth IPO
Read the admission document in full
Especially the "Risk factors" section — often revealing of the real weak points. And the "Use of proceeds" section — are the funds raised used to finance growth, or to let the founders cash out?
Check the valuation multiples
Compute the EV/EBITDA and P/E implied at the offer price. Compare them with similar companies already listed on Euronext Growth. A premium of 40-50% over comparables with no convincing justification is a red flag.
Analyse the structure of the deal
What proportion of the funds goes to the company (a capital increase) vs to selling shareholders? A deal that is mainly a sell-down (the founders selling) is a far less positive signal than a pure capital increase to finance growth.
Check the lock-up length
How long are the existing shareholders committed for? A lock-up of at least 6 months is reassuring. A lock-up of 3 months or none at all is a signal that the founders anticipate quick selling pressure.
Assess revenue visibility
Does the business model generate recurring revenue (SaaS, subscriptions) or project-by-project revenue? Recurring revenue gives visibility over the following 12-24 months — crucial for an investor subscribing on the basis of projections.
The alternative strategy: wait 6-12 months
A pragmatic approach is to never subscribe to a Euronext Growth IPO and instead wait for the company to publish its first 2 to 4 half-year results as a listed company. This lets you:
- Check that the business plan presented at the IPO is materialising in the figures
- Assess the quality of management's financial communication with listed-market investors
- Often buy at a lower price — post-IPO disappointment is common
- Have the data needed for a complete composite ML score
Screener Small Caps adds new stocks to its universe as soon as they have enough data history for ML scoring — generally 3 to 6 months after the IPO.