Brazilian firms surfing corporate reorganization wave as IPOs dry up

Significant hikes to interest rates have throttled liquidity in the Brazilian stock market and dissuaded companies from going public. In the meantime, firms are eyeing reorganization as a means to expand abroad

ipos reorganization
Digital bank Banco Inter announced its desire to migrate to New York, but the operation failed due to market conditions. Photo: Rafapress/Shutterstock

Over the past two years, the Brazilian stock exchange has seen an unprecedented wave of startups going public, creating the domestic market’s very own tech sector. However, throughout 2021, the Central Bank’s push to control inflation by jacking up benchmark interest rates caused liquidity to run dry. Now, for 2022, this trend is likely to scare away newcomers and spark a spate of corporate reorganizations, with an eye on taking IPOs to international markets.

The shift began in Q3 2021, as it became clear the Central Bank would be even more hawkish than expected in its interest rate hikes.


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