But companies going public will be solid performers, survey indicates.

In 2009, only 41 companies went public in the U.S., according to information from Jay Ritter, a professor of finance at the University of Florida. To be sure, that’s nearly double the 21 IPOs in 2008. However, it’s well off the pace hit earlier in this decade; between 2000 and 2007, an average of 155 companies entered the public markets each year.

This coming year, however, the IPO markets will be busier. That’s the conclusion of a recent survey of capital markets executives at leading investment banks, conducted by the Chicago-based accounting firm BDO. Just over two-thirds of the executives polled predict an increase in activity when compared to 2009; one-fourth say it will be substantial. On average, the bankers are forecasting a jump in the number of IPOs of 25 percent. That would mean about 51 companies coming public in the U.S. this year.

Not surprisingly, tech companies are expected to make a solid showing among 2010’s IPO roster. More than four in five respondents predict an increase in technology-related IPOs; energy and bio-tech companies also should do well, the survey indicates. At the bottom of the list, only 23 percent predict growth in the number of IPOs from the consumer goods and retailing sectors.

The driver behind the anticipated increase in IPOs? The upward march of the stock market, according to 44 percent of survey respondents. The S&P 500 index has risen steadily since bottoming out at about 675 in March of 2009. It hit 1,140 as of mid-January 2010, a jump of 70 percent.

Moreover, the executives are predicting that the companies that go public will be bigger than they have been in the past, with an average deal size of $400 million. The corresponding number for the first quarter of 2009 was $270 million, according to Renaissance Capital.

The expected jump in deal size continues a shift that began earlier in this decade, when bankers focused on bringing out larger, more established companies, says Lee Graul, partner in BDO’s capital markets practice. “Now, you have to have a track record, demonstrate a solid base, have an ability to generate cash, and an opportunity for long-term growth,” Graul says. Indeed, the median age of the companies going public averaged about 11 years between 2000 and 2009. In contrast, the companies that went public in the 1990s boasted an average age of just 7.5 years, according to Ritter’s information.

In fact, while bankers are predicting increased IPO activity, they’re also much more focused on businesses’ fundamentals than they have been in the past – say, during the Internet mania of the late 1990s. “They [the bankers] won’t get involved if they don’t see profits and an ability to generate cash,” Graul says. While 27 percent of companies that went public in 2009 had earnings per share of less than zero, an eye-popping 76 percent of those going public a decade earlier were operating in the red, again according to Ritter.

Private equity firms will be the greatest source of IPOs in 2010, 39 percent of the execs surveyed concluded. Only 17 percent said that privately held firms would be sources of IPO companies. That’s often a plus for the IPO market, as the PE firms can groom their portfolio companies before setting them loose on the public, Graul says.

As a result, even though the projected increases in the number of deals and deal size sounds large, this isn’t a case of irrational exuberance, Graul notes. Instead, in 2010, we’ll likely see a reasonable number of solid, well-performing companies enter the IPO market. “The paradigm has completed changed from the 1990s,” Graul says. “This is a good shift.” ###