MADRID, March 31 (Reuters) - European equity markets suffered their worst quarter in more than two decades at the start of 2022 as economic worries were exacerbated by the war in Ukraine.

Proceeds from equity capital markets in Europe were $10.6 billion, down 83% from last year and the lowest figure since 2000 when the dotcom bubble burst, spooking investors for years, according Refinitiv data up to March 21.

While market turmoil has affected corporates worldwide, Europe has suffered the most, with proceeds from initial public offerings (IPO) falling by 58% worldwide, compared to 88% in Europe.

"From January onwards, the market has been dealing with the change in expectations towards interest rates, the conflict in Ukraine and the situation in Asia, with Covid-19 and the potential impact on supply chain," said Nick Koemtzopoulos, Head of EMEA Equity Capital Markets at Credit Suisse.

Companies including Swiss skin care firm Galderma, Spanish lender Ibercaja and warehouse management firm Mecalux postponed plans to tap investors' appetite due to the market uncertainty aggravated by the war in Ukraine.

The March window was initially expected to generate a windfall for investment banks given a solid earnings season in January and February following last year's record volumes.

In Europe, 2021 was the busiest year in terms of capital markets activity since 2014, with more than $257 billion raised from about 1,300 deals, including IPOs, share sales, rights issues and equity-linked bonds.

Equity capital markets are a relevant source of revenues for global investment banks. In 2021, according to a report from Keefe, Bruyete & Woods, equity capital markets contributed between 3 and 8% to the revenues of the main U.S. banks.

But inflation risks, already a concern for investors, were compounded by Russia's invasion of Ukraine in late February, driving the Euro Stoxx 50 volatility index close to 50, the highest level since February 2020, alarming investors.

Dealmakers typically advise against listing a company if the volatility index is trading above 25 points. Now it trades at 28 points, a similar level to December 2021.

In the first three months of 2022, just one European company ranked in the top 20 global ECM offerings: Var Energi AS's IPO in Norway, which raised $865 million.

BETTING ON A FIRM PIPELINE

Over the last two weeks secondary markets have started to recover as volatility is subsiding and major European indices are returning to pre-war levels.

This has opened a window of opportunity for some of Europe's biggest companies.

This week shareholders at Barclays and Glencore launched accelerated bookbuildings worth more than $1 billion while Italian yacht manufacturer Ferretti braved the markets raising $243 million in its upcoming Hong Kong listing.

In another sign of equity capital markets activity picking up, Amsterdam-listed BE Semiconductor Industries launched a 175 million euro convertible bond while French utility EDF will soon unveil the outcome of a rights issue set to raise 3.2 billion euros ($3.57 billion).

"As the last week and a half has shown, once there is a window of some market stability, there tends to be a rapid surge in activity and performance across the ECM market – and in this case it’s across all products, and all geographies," said Aloke Gupte, JP Morgan Co-Head for Equity Capital Markets in EMEA.

Investment banks are betting on a recovery in the coming months if geopolitical tensions stabilise, as a number of companies are waiting for a better market environment to tap deep-pocketed investors eager to allocate capital.

"I think if we see some resolution to the conflict in Ukraine, the IPO market will reopen very quickly," said Koemtzopoulos.

European giants like luxury sportscar maker Porsche, chip designer ARM and Galderma are already working with advisors on multi-billion dollar offerings.

In Spain, which ranked as one of Europe's most active markets last year, companies including warehouse specialist Mecalux have revamped their listing plans and will attempt to list in Madrid before the summer. ($1=0.8967 euros) (Additional reporting by Lucy Raitano, editing by Chizu Nomiyama)