Appetite grows for Russian IPOsOctober, 26 2012
New wave of Russian privatization
Update January 17, 2013 :
See the new analytical note from The French-Russian Observatory on “New wave of Russian privatization”. Its author is Sergei Guriev, the rector of the New Economic School and a member of the French-Russian Observatory’s Scientific Board. The presentation of the note took place in Paris on January 14, 2013 during a conference-debate devoted to the macroeconomic situation in Russia and the forecast for 2013.Click here to read the full version of the note in English.
Moscow-based analysts are confident, however, that the resilient consumer growth story underpinning the Megafon listing, currently underwritten by Morgan Stanley, Sberbank CIB, Citi, Credit Suisse and VTB, Russia’s second-biggest bank, means the IPO pipeline is still very much on track.
Russian stocks have not been popular over the last four years, and trade at a significant discount to their emerging market peers. IPOs have been few and far between. There were only three listings in 2009 in the aftermath of the global meltdown, but things picked up in 2010 with 12 IPOs, including aluminum producer RusAl in Hong Kong and e-mail service Mail.ru in London.
Hopes were higher in 2011 with some $30 billion worth of IPOs planned. However, as fears of a second global recession mounted, only 10 companies actually made it to market. Search engine Yandex led the way, raising $1.3 billion on the NASDAQ, followed by mid-sized commercial bank Nomos, which netted $718 million in London.
This year had been even slower, with only one successful IPO before Sberbank’s listing: RusPetro, an oil explorer with assets in western Siberia, raised $250 million in London in January.
In another sign that investor appetite for Russian IPOs may be mixed, MD Medical Group, a leading Russia chain of private health clinics specializing in reproductive services and maternity care, held a successful $311 million IPO, while leading commercial bank Promsvyazbank delayed its listing plans, citing current market conditions.