German-French defense company KNDS has delayed its planned IPO after a recent selloff in European defense stocks dampened investor sentiment. The maker of the Leopard 2 and Leclerc battle tanks had been aiming to list in Frankfurt and Paris before the summer break, but shareholders have decided to wait until investor sentiment improves.
“This is not hugely surprising,” says Michael Field, chief European markets strategist at Morningstar. “The fundamentals and order book look solid. But sentiment towards the sector is weak at the moment and the cancellation of the frigate contract between the German government and Rheinmetall has certainly not helped.”
Rheinmetall is assessing the potential financial impact of the halt to construction of six F126 frigates. German Defense Minister Boris Pistorius suspended the naval project at the end of June after costs spiraled out of control.
The company said preparations for the IPO are largely complete and that it is ready to resume the process once market conditions improve, with September now seen as the next earliest possible window.
The delay comes as defense stocks have pulled back sharply after a strong rally earlier this year. Shares in Rheinmetall RHM, widely viewed as the closest listed peer to KNDS, have fallen more than 30% since the beginning of the year.
The share price of Czechoslovak Group CSG, one of Europe’s leading makers of artillery ammunition for NATO members and Ukraine, has fallen more than 57% since its IPO in January.
According to media reports, investors value KNDS at around EUR 12 billion, below earlier expectations of EUR 15 billion or more, with the company’s owners reportedly unwilling to accept a valuation below EUR 12.5 billion.
“I would expect KNDS to potentially come back to an IPO later this year if and when sentiment improves”, Field adds. “They are not in a bad position fundamentally, but it would be hugely counterproductive to list while sentiment is so low. Some positive results in earnings season from KNDS and competitors could help, but its likely that investors will want to see a couple of quarters of good numbers before they are more enthused with the sector.”
KNDS announced plans for the listing in June after first unveiling its IPO intentions in December 2025. The company, created through the 2015 merger of France’s Nexter and Germany’s Krauss-Maffei Wegmann, is owned equally by the French government and several German families. Under the IPO plans, 20% of the shares would be publicly listed, while the families are negotiating a separate sale to the German government, leaving both Paris and Berlin with 40% stakes.
Germany’s government said it remains committed to acquiring a stake in KNDS despite the delayed listing. Berlin has already reached a preliminary agreement with the company’s French partners and existing shareholders on the framework for a joint investment intended to preserve balanced governance and safeguard national security interests. Under the original plan, the French state and the current shareholders would each sell a 10% stake as part of the IPO.
German IPO Market Benefits From Defense Sector in H1
The postponement comes despite a recovery in Europe’s IPO market during the first half of 2026, according to EY. In Germany alone, four companies have gone public in the first half of the year—double the number a year earlier—and three of them operate in the defense and security sector. Total proceeds from German IPOs nearly doubled to about EUR 744 million, with KNDS widely regarded as the year’s most significant listing candidate before its postponement.
”Markets are fundamentally receptive to new listings, but much depends on the sector and a compelling equity story aligned with current growth trends,” Martin Steinbach, EY’s head of IPO and listing services in Germany, said in a report.
He said companies looking to capitalize on relatively narrow IPO windows need to be well prepared and disciplined enough to wait if market volatility or geopolitical risks increase. Steinbach added that defense companies continue to benefit from rising order books and strong demand for military equipment, creating favorable conditions for future listings.
