Russia equity markets back in business as IPO trio find demand
Primary issuance back to 2013 levels; private-sector names prove popular with investors
Surging share prices attracted a clutch of Russian companies to the equity capital markets in November, putting the sector on course for its busiest quarter since early 2013.
The $1.5 billion IPO of En+, the aluminium and power group owned by Oleg Deripaska, dominated headlines, but listings by two smaller domestic firms and a series of secondary deals received a more enthusiastic welcome from fund managers focused on emerging Europe.
“Investors want to see private companies, ideally exposed to the Russian domestic segment or consumer demand, which has been rebounding over the past year to 18 months,” says Dmitry Brodsky, head of Russia and CIS ECM at Renaissance Capital.
Obuv Rossii, the first of three new companies to come to market this autumn, ticked all these boxes. The shoe retailer, which priced a R5.9 billion ($103 million) IPO in Moscow in late October, was raising funds to double its national footprint to more than 1,000 stores.
The listing was only the second by a Russian company this year, following the $324 million IPO of children’s goods retailer Detsky Mir in February, and the first small-cap listing from the country since the annexation of Crimea and the imposition of western sanctions in 2014.