Hidroelectrica effect sets off new wave of IPOs on Bucharest Stock Exchange

Hidroelectrica effect sets off new wave of IPOs on Bucharest Stock Exchange
Both Premier Energy and JT Grup Oil have announced plans to list on the Bucharest Stock Exchange (BVB). / bne IntelliNews
By bne IntelliNews April 24, 2024

In the last few days both Premier Energy and JT Grup Oil announced plans to hold initial public offerings (IPOs) on the Bucharest Stock Exchange (BVB). 

The announcements come after the long-awaited €2bn IPO of Romanian hydropower giant Hidroelectrica in 2023 gave a boost to the local capital market. This was the largest share listing not just in Romania but across Europe during 2023. 

They also follow Romania’s elevation to Emerging Market status by FTSE Russell in 2020. 

Premier Energy, a vertically integrated energy group particularly active in Romania and Moldova, announced on April 18 it initiated procedures with the Romanian Financial Supervisory Authority (ASF) for its €125mn IPO on the BVB. This is set to be the first IPO on the local exchange since Hidroelectrica’s.

Premier Energy, owned by Jiri Smejc’s Emma Capital, said the funds raised through the IPO will accelerate its development, and particularly mentioned the renewables production segment.

“[N]ow is the right time for Premier Energy Group to conduct an IPO and to leverage the exciting opportunities for accelerated development that a public listing on the Bucharest Stock Exchange will deliver,” said Jose Garza, chief executive officer of Premier Energy Group.

“As the largest renewables production manager and aggregator of solar and wind plants in Romania and Moldova, Premier Energy Group is well-placed to benefit from the forecasted growth of renewables in the region,” he added.

On top of that, a spokesperson for Premier Energy told bne IntelliNews that the Hidroelectrica IPO had been “transformative” for the local capital market.

Independent fuel distribution company JT Grup Oil followed swiftly, with its CEO Jean Paul Tucan telling business daily  Ziarul Financiar that it too plans to carry out an IPO followed by the listing of its shares on the BVB. 

The shares of JT Grup Oil would be listed on the alternative market AeRO of the Stock Exchange.

The company, an independent fuel distribution company in Romania, recently completed the first stage of a planned €25mn terminal for oil products in Constanta port.

JT Grup Oil, founded in 2001, carries out fuel distribution operations in the southeast area of Romania using its fleet of 11 tankers. For fuel distribution in the northern part of the country, the company has partnerships with long-term collaborators.

In 2004-2005, the company built a bitumen terminal in Medgidia, which it has since sold, investing the proceeds into the development of its fuel distribution network. Since 2023, JT Grup Oil has diversified its product range and entered the excise-free diesel segment, which serves commercial vessels for the Midia and Constanta ports.

The listing announcements come after a year in which the Romanian stock market achieved numerous historical highs, culminating in the Hidroelectrica IPO. 

The landmark listing not only strengthened the Bucharest Stock Exchange's standing within the European financial sphere but also led to a surge of interest and confidence in the Romanian capital market.

The boost to the market had long been projected, both by stock exchange executives and investors such as Johan Meyer, portfolio manager of Hidroelectrica shareholder Fondul Proprietatea (FP), who told bne IntelliNews in 2023 that he anticipated a new wave of IPOs on the local exchange. 

In the opening months of 2024, the Romanian stock market continued to perform strongly, as reflected in the valuation of listed companies and the performance of the flagship BET index. 

“At the beginning of 2024, the Romanian stock market recorded new records in terms of capitalization of listed companies and the level of the main BET index, continuing the positive trend of the previous year,” commented Adrian Tanase, BVB CEO, back in February. 

The market capitalisation of the main BVB market stood at RON324bn in 2024 ytd, above the RON294bn recorded in 2023, and RON197bn in 2022.

The BET index, based on the performance of the 20 most actively traded stocks, broke through the 17,000 point barrier at the end of March, and has since peaked at 17,251 points on April 8, albeit since dropping back below 17,000 points.