Portugal's Novo Banco is gearing up for a significant initial public offering (IPO), potentially one of the largest of the year. This move comes amid a resurgence of interest in stock listings, as market indexes remain near multi-year highs.

In a recent statement, Novo Banco, the country's fourth-largest bank, announced it is collaborating with its major shareholder, U.S. private equity firm Lone Star, to facilitate the IPO over the coming months. The bank was established in 2014 following the collapse of Banco Espírito Santo (BES) and was subsequently bailed out by the state. Lone Star acquired a 75% stake in Novo Banco in 2017, while the remaining shares are held by a resolution fund and the Portuguese government, which owns 11.46%.

Sources indicate that Lone Star has been weighing the option of either an IPO or a complete sale of its stake. Recent estimates suggest that Novo Banco could be valued at around 5 billion euros ($5.20 billion). However, a full sale to another Portuguese bank now seems unlikely, as CEO Mark Bourke has consistently supported the IPO route to maintain the bank's independence.

While Novo Banco has not disclosed the specific percentage of its capital that Lone Star intends to float or the stock exchange for the listing, Finance Minister Joaquim Miranda Sarmento mentioned that the IPO could involve 25%-30% of the bank's capital.

The current favorable conditions in the equities market have prompted several companies in the region to pursue IPOs. For instance, travel tech firm HBX Group recently raised 860 million euros in its IPO and debuted on the Spanish stock market, although its shares experienced a significant drop on the first trading day.

As Novo Banco prepares for its IPO, it reflects a broader trend of renewed investor interest in public listings, positioning the bank for a potentially lucrative future.