Another Russian IPO bites the dust as Polyplast pulls offer

By bne IntelliNews December 7, 2012

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Another Russian IPO has bitten the dust, as Polyplast announced on December 6 that it has postponed its listing on the Moscow Stock Exchange, due to poor market conditions. The collapse of the offer is another sign that Russian equity offers remain stuck in their own version of Groundhog Day.

The chemical producer made its call to postpone the IPO following a road show that saw it meet with 30 domestic and foreign institutional investors between November 20 - 29. During those sales pitches Polyplast said it planned to invest around RUB3bn by 2016 into development, including RUB1.3bn to be invested in 2013.

"So far, the unfavorable situation on the Russian stock market does not allow for attracting the necessary volume of funds at a fair, according to our estimates, share price," Polyplast Chairman Ilsur Shamsutdinov said in a company statement.

Ironically, Promsvyazbank was one of the organizers of the IPO, who along with Finam, had set an initial pricing range of RUB357-417 per share, valuing the company at RUB5.514bn. Polyplast planned to place 20%-24% of the company's increased charter capital - 2.5m-3.16m common shares - on the MICEX Innovation and Investment Market, reports Interfax

The scuppering of Promsvyazbank's own float in October was the first concrete sign that the latest round of optimism over the Russian IPO market - kicked off by Sberbank's SPO in September - was again wide of the mark. The trend has been consistent for a couple of years now: a major deal is successfully sold - Sberbank, Yandex, Mail.ru - raising expectation and therefore the prices sought by smaller issuers. However, those deals often promptly collapse as investors baulk at how little is left on the table, particularly when owners are looking to cash out.

Naturally, Polyplast was not ready to admit total defeat, and claims it will return to the idea of an IPO at some point. "We intend to continue open and constructive dialog with institutional investors," Shamsutdinov said.

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