Russia's IPO boom

Russia's IPO boom
Russia's IPO market has been dead for the last four years, but last year as the coronacrisis faded it suddenly came back to life and now a frenzy of listings have happened, with more in the pipeline. / bne IntelliNews
By Ben Aris in Berlin October 4, 2021

Russian IPOs are back and billions of dollars have already been raised and billions more of listings are in the pipeline in the coming year. The Russian corporate story is hot again for the first time in about a decade.

International portfolio investors are currently overweight on Russia not because they have been buying the household names, but because they have been snapping up all the new issues coming to market in the last year.

Six Russian companies IPO’d in the last year just as investor sentiment was hit by the coronavirus (COVID-19) pandemic and the risk of possible new Western sanctions on Russia following the poisoning of Kremlin critic Alexei Navalny. But the pandemic is fading and a détente was reached with US president Joe Biden in Geneva on June 16 that reduced perceived risks. Now there is some $10bn in potential new IPOs in the pipeline, according to analysts.

Growth stocks have been the favourite, many of them from the new economy like Russian e-commerce powerhouse Ozon, which raised $1.2bn last year. But increasingly new names are catching the headlines such as the hard discounter Fix Price, which raised $2bn in March, residential developer Samolet that raised $40mn in October, private healthcare company EMC that raised $450mn in July and forestry group Segezha that raised $414mn in April all listing shares this year in the country’s biggest listings spree since 2008. Other industries represented by companies planning to go public soon include retail, insurance, car-sharing and automotive leasing, and financial services.

The most recent addition to the IPO family is Renaissance Insurance, one of Russia’s leading diversified universal insurance companies, that announced on September 27 it intends to list in the near future and hopes to raise $290mn (RUB21bn) with a valuation of around $1bn-plus. The company has invested heavily in its digitalization of core services presence and wants to raise capital to invest more and use its digital platform as a cost-efficient market consolidator, as well as some of the shareholders hope to take some cash off the table.

The IPO bonanza has seen exchanges wooing Russian companies hoping to go public. NYSE, Nasdaq and the London Stock Exchange are trying to attract new Russian members after Ozon listed shares on Nasdaq in November, successfully tapping into the deep US pool of tech investors.

Fix Price went for dual listing in London and Moscow in March as Russian firms increasingly favour their home market after it was hooked into the international settlements and payment system Clearstream. Now foodtech company VkusVill and SPB Exchange are among many considering selling shares in the US, while information technology solutions provider Softline may opt for a dual listing in the UK and Russia.

New York has not seen such a flurry of Russian share offerings since the initial wave of IPOs in the 1990s. The LSE aggressively marketed itself to prospective clients in the noughties, but activity almost completely died off following Russia’s annexation of the Crimea in 2014.

The market was dead until Russian children’s good retailer Detsky Mir floated in 2017 in a highly anticipated IPO, followed by Russian shoe retailer OB group (Obuv Rossii) which raised $105mn with an IPO in Moscow in October 2017. But then the listing action died completely and was only revived last year. Now the listings frenzy is gathering momentum.

New York has been out of favour as a listing venue, but the Ozon seems to have triggered a comeback. Four Russian companies are targeting New York deals in the coming months.

London, long the go-to international exchange for issuers that wanted to supplement Moscow, is now feeling the heat as it has been challenged by both Moscow and New York. The Moscow Exchange (MOEX) has also been aggressively marking its services to Russian would-be plcs and has invested heavily to significantly improve its services. Increasingly major Russian companies have chosen to do Moscow-only listings.

The sudden appearance of a large and growing pool of retail investors has proved to be increasingly enticing for Russian corporates to list at home. Falling bank deposit rates have caused millions of Russian retail investors to cast about for something with a better return and they have been flooding into equities to now account for some 40% of the turnover on MOEX.

At the same time, some internationally traded Russian entities have returned home as MOEX actively pursued a programme to unwind ADR proxies that are listed on international exchanges and bring their investors to Moscow to hold the underlying Russian traded shares directly, cashing in on the traditional spread between the ADR proxy and the locally listed shares in the process. Other Russian companies, such as supermarket chain X5 Retail Group and banking group TCS Group, have chosen to add to their international listing with a second Moscow-based listing. Russia’s most successful real estate developer PIK has opted to delist from its overseas exchange entirely and move its shares back to Moscow.

Further out there are some very big potential IPOs in the pipeline. Russia’s petrochemical behemoth Sibur has been talking about an IPO for years in one of the most highly anticipated listings from the Russian market. While the company told bne IntelliNews in an exclusive interview it is committed to an IPO, it is the question of timing that has not been decided yet. Likewise, metal and mining giant Metalloinvest may sell shares to the public as early as in 2022. Both companies may be valued at least $20bn each in their respective offerings.

Below is the breakdown of Russian companies planning IPOs by potential listing location and of those that recently completed IPOs by location.





Russia’s leading multi-category e-commerce platform, often referred to as “the Amazon of Russia”, went public on Nasdaq and MoEx in November, raising almost $1.3bn in an offering that valued the company at about $6.2bn. Its infrastructure and delivery network have some of the widest coverage among e-commerce players in the country, enabling Ozon to provide the Russian population with fast and convenient delivery via couriers, pick-up points and parcel lockers. Its extensive logistics footprint and fast-developing marketplace platform allow thousands of entrepreneurs to sell their products across Russia’s 11 time zones and offer millions of customers one of the widest selections of goods across multiple product categories.  



Russia's largest foodtech player runs a chain of healthy food retail shops unique for the Russian market – they work with local producers and sell the majority of assortment under their own brand. The company is considering an IPO in the US in the beginning of 2022 with a valuation of as much as $5bn, the Wall Street Journal reported September 7. VkusVill has a unique distribution model operating both offline and online. The company boosted online sales to almost 25% of total at the end of 2020 from a year earlier and became an absolute leader in Russia in the express food delivery market. On top of this, the business is managed via a patented management model with minimal hierarchy and deep effective horizontal relationships.

Delimobil (dual listing in New York and Moscow)

One of Russia’s leading car-sharing operators boasts more than 15,000 vehicles in its car park. The company, which competes with Russia’s Yandex.Drive, plans an IPO this autumn both in Russia and the US and may raise about $350mn, Reuters reported on September 7. Russia's VTB Capital (VTBC) in June agreed to buy a stake in Delimobil's parent Delimobil Holding SA for $75mn from the company's founder and President Vincenzo Trani, VTBC said in a statement June 4, adding that it saw “an excellent investment opportunity'' in the car-sharing market. Trani’s holding Mikro Capital Group remains a majority shareholder in the company, according to Forbes, which called Delimobil the contributor to the World Economic Forum’s 2030 Agenda of a renter, non-owner society.


Russia’s leading website for buying and renting residential and commercial properties and the operator of the country’s largest online database for real estate. Just like Zillow, the most visited real estate website in the US, Cian is tapping rising demand for online property listings in Russia. The company had more than 4mn active listings as of March, and its websites’ monthly visitors surpassed 21mn. Cian may offer shares on the Nasdaq exchange in New York and may seek to raise about $350m, Reuters reported September 7. However, on September 27 reports emerged that Russia’s Federal Antimonopoly Services (FAS) received an application from the Russian classified car sales website to buy the company, so this IPO may not happen.  

SPB Exchange (dual listing in New York and Moscow)

Russia’s leading exchange for international securities’ trading provides access to share-trading of such companies as Apple and Amazon. The exchange’s total trading volume jumped more than four-fold in the first half of 2021 to about $206bn from about $45bn a year earlier. The bourse may sell shares both on the Nasdaq and on its own platform this year and may be valued at $1.8bn-$2.5bn, Kommersant reported on August 5.  


Familia is a fast-growing and sustainably profitable off-price retailer, specialising in apparel and home goods. The company, whose investors include TJX, Goldman Sachs and Baring Vostok Capital Partners, is preparing for an IPO in New York as early as the start of 2022, Bloomberg reported June 4. Founded in 2000, it became a pioneer in the Russian off-price market, largely following the business model and best practices of the US off-price retailers TJX and Ross, and adapting those to the Russian market. Familia currently manages a network of over 360 stores in more than 110 cities and adds new shops every month.  




Fix Price (dual listing in London and Moscow)

The biggest player in the Russian discount retail market in March conducted the largest retail IPO in Russia, raising $1.8bn and listing shares in Moscow and London. The offering valued the company at about $8.3bn and resulted in a free float of 21%. The company is the dominant player in the so-called dollar-store market with a share of about 93% and plans to further expand its retail network three-fold by 2025. Fix Price has 4,700 own and franchise outlets throughout Russia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Latvia and Uzbekistan, according to its website. The company in August said first-half revenue surged 28% to RUB106.1bn ($1.5bn), with like-for-like sales rising 12% over the period. The business model’s resilience and flexibility helped to achieve strong results amid a complex trading environment caused by macroeconomic headwinds, CEO Dmitry Kirsanov said in the earnings statement on August 12.  


Softline Group (dual listing in London and Moscow)

A Russian provider of information technology solutions with a focus on digital transformation, cloud and cybersecurity boosted revenue by 9% to $1.8bn last year (in 2020), according to its website. The company, founded by Chairman Igor Borovikov, is headquartered in London and generates more than two thirds of its revenue from cloud services, hardware solutions and software subscriptions provided to clients in 55 countries across Europe, Central Asia, Latin America and Asia-Pacific regions. Softline boosted the share of sales outside Russia to 45% of total in 2020 both via organic growth and mergers & acquisitions. On September 30 the company confirmed it intends to list in London and Moscow in the nearest future.  




European Medical Center (EMC)

A Russian network of premium healthcare clinics in July raised $500mn in an IPO, the first one in the Russian private medical services industry in almost 10 years. Despite the industry’s low visibility to investors and traditionally slow business activity during the summer season, the offering saw high demand, including from retail investors, valuing the company at about $1.13bn and giving it a free float of 44%. EMC boasts one of the highest Ebitda margins among publicly traded companies in the industry globally, with adjusted Ebitda jumping 52% to €56.1mn in the first six months of this year, on Ebitda margin of 42%, up from 32% a year earlier, the parent company United Medical Group CY plc reported August 30.

Samolet Group

One of the leading developers in Russia with the largest land bank in the sector in October raised $40mn in an IPO that valued that company at about $720mn, with a free float of 5.1%. Samolet’s IPO was the first among private companies in Russia since 2017 and the first one in the country’s sector in nearly 10 years. In less than a year since the IPO, the company’s capitalisation has increased more than fivefold to over $4.1bn.  


Tapping Russia’s Green Gold, wood products company Segezha Group completed its IPO on MOEX in April, raising slightly over $400mn. The deal, which gave Segezha a free float of 24%, valued the company at around $1.7b. Its current freefloat is 31% and it remains majority-owned by Sistema, Vladimir Yevtushenko’s London-listed conglomerate. Unlike many of its peers in the paper and wood products sector, the company controls its own forest resources and holds long-term leases on Russian forest land the size of Austria. It also benefits from a cost base in rubles, while the majority of its sales are in euros and US dollars.  


Renaissance Insurance

Renaissance is a digital disruptor of Russian insurance market with about 70% of claims processed exclusively through online channels and new partners – from online retailers to pet shops – connected in 1-2 days versus more than a month with traditional peers. The company, whose main shareholders include its founder Boris Jordan, Baring Vostok Capital Partners, Millhouse and Invest, AG has announced its plans for an IPO in Moscow, offering new shares for $250mn, according to Interfax, while Bloomberg reported the company is seeking valuation of $1bn. Independent status helps Renaissance increase sales efficiency and grow twice as fast and twice as profitable as its main competitors. While insurance remains its main focus, Renaissance is also developing its telemedicine project, which started to grow exponentially amid the coronavirus pandemic.


Europlan ranks among 15 largest auto leasing companies in Europe. The company is a long-established leader in Russia, providing a full range of leasing and operational services covering cars, trucks, commercial vehicles and special equipment to individuals and legal entities across Russia's key towns and cities. Europlan's owner Safmar Financial Investments is planning the company’s IPO in Moscow and seeks to raise at least $300mn, Reuters reported May 17.


One of Russia’s largest state-run lenders plans to hold an IPO by the middle of next year as part of the bank’s privatisation, the Financial Times reported June 21. The lender, which has a book value of about $7.4bn and assets exceeding $50bn, may offer between 15% and 20% of its shares on a Russian and possibly an international exchange next year, according to the newspaper. The offering would be the first Russian banking IPO since Credit Bank of Moscow’s placement in 2015. Russia’s central bank, which became Otkritie’s owner in 2017 to get it through financial rehabilitation, is also considering an option to sell controlling stake to a strategic investor.  



Mercury Retail

Mercury Retail pioneered the ultra-convenience store concept in Russia and is now the country's largest retailer in this channel, operating approximately 13,500 neighbourhood stores nationwide under Red & White and Bristol brands. The company may hold an IPO this year or in early 2022 and its owners are seeking a valuation of as much as $20bn, Bloomberg reported on September 15. Its stores offer a focused assortment of daily essential goods within a short walking distance of customers' homes at among the lowest prices on the market. Ultra-convenience is the fastest-growing channel in the Russian food retail market, with sales forecast to more than triple by 2025 to over RUB5 trillion, according to InfoLine. Mercury’s two brands have a combined market share in the ultra-convenience segment of 43% and about 4.6% of the total food retail market, the researcher estimates. The two chains’ like-for-like sales rose 20% in the first half of the year, while total sales jumped 27% to RUB330bn, compared with RUB580bn for the full year of 2020, according to InfoLine.  



Russia’s largest petrochemical company recently announced a merger with its rival TAIF, a deal that postponed Sibur's plan for an IPO. The company is currently implementing a plan to further expand its petrochemicals business and enter new export markets as it capitalises on synergies from the merger with TAIF. Sibur may go back to the IPO plan in a couple of years and the value of the company may exceed $20bn.


The world's largest producer and supplier of merchant hot briquetted iron, or HBI, products, a low-carbon raw material to produce "green" steel, plans to double its HBI capacities to meet growing demand for environmentally friendly feedstock. The company plans an IPO as early as in 2022 amid investor pressure to accelerate the transition to “green” metallurgy, according to Bloomberg. Metalloinvest expects a capitalisation of about $20bn, industry analysts say.


This article is from bne IntelliNews’ monthly magazine that covers business, economics, finance and politics of the 30+ countries of New Europe.

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