Stock exchange rush: record number of companies in 17 years go public
Izvestia has found out that 14 companies went public in Russia this year. This is a record for the last 17 years - the highest number was in 2007, when 18 companies made initial public offerings. Because of the high key rate, it has become difficult for firms to borrow, so they go to IPO to attract additional funding. Most often shares are placed by companies in IT, consumer market and pharmaceuticals. However, it was difficult for investors to make money on IPO - shares were falling along with the market. What will happen to offerings next year - in the material "Izvestia".
How many companies went public in Russia in 2024?
In Russia this year, 14 companies held an initial public offering (IPO) - 13 of them on the Moscow Exchange and one firm on the SPB Exchange, "Izvestia" found out. This is almost twice as much as in 2023 - then eight organizations entered the stock market.
The index of 2024 is a record for 17 years, since the beginning of the global financial crisis. For example, in 2007, 18 companies went public on the IPO on the Moscow Exchange, and a year later - only two, said the press service of the trading floor.
In 2024, in particular, software developers Diasoft and Arenadata Group, MTS Bank, hypermarket VseInstrumenty.ru, pharmaceutical manufacturer Ozon Pharmaceuticals and car rental service Delimobil went public on the Moscow Exchange. And the SPB Exchange hosted the microchip manufacturer Element. A quarter of all companies that entered the stock market in 2024 represents the IT sector.
However, the majority of IPOs in 2024 turned out to be unprofitable for investors. For example, Diasoft's securities initially showed great growth, but by the end of the year collapsed by 35%, explained Natalia Milchakova, a leading analyst at Freedom Finance Global. The expert specified: after the initial public offering, Zaimer shares lost the most - they fell in price by 43%.
Their quotations fell with the market. By the end of the year, the Moscow Exchange Index fell by 11% to 2747 points, and in December, for example, it fell even lower - to 2400 points.
- Nevertheless, the majority of shares of the issuers that entered the stock exchange this year collapsed, showing dynamics worse than the market. However, despite the quotations, almost all companies have shown quite good financial results this year," says Natalia Milchakova.
At the same time, according to her, there were also successful placements - for example, securities of "Arenadata" rose in price by 28%. It was profitable to participate in IPO mainly for private investors, who bought securities at the placement and almost immediately sold them, summarized the expert.
Why companies are actively entering the stock exchange
Companies have become more frequent IPOs this year to reduce the cost of financing, said analyst of financial markets service "Gazprombank Investments" Andrei Stratichuk. Amid high key rates, corporate lending is slowing down because companies can't pay for such expensive loans. In October, the Central Bank raised the key rate to a record 21%, while loans to companies are not issued cheaper than 27% per annum.
- Also, companies go to the stock exchange because of closed foreign capital markets - they have the opportunity to raise money for development only within the country, - said the director of client relations "BCS World of Investments" Andrei Petrov.
Previously, many companies went for IPO on foreign stock exchanges. Also firms often resorted to double listing - when securities of one company are listed on several stock exchanges.
Publicity for many companies allows them to hire new employees. There is an opportunity to launch motivational programs (for example, employees are given shares) and look for new clients - mainly in the IT sector, says Andrei Petrov.
The interest of large and medium-sized companies in this sector in initial public offerings is due to the fact that the Russian IT industry is now facing the possibility of import substitution of foreign high-tech products, believes Natalia Milchakova from Freedom Finance Global.
- Many foreign competitors from Russia have left, refused to supply products or continue servicing them. Now Russian IT sector issuers have a good chance to increase their market share, revenues, business profitability and ultimately their market value," the expert explained.
Bureaucratic barriers are also decreasing - it has become easier for companies to enter the stock exchange. This is confirmed by the fact that quite small companies are taking this step: real estate developer APRI or dairy packaging manufacturer Lambumiz, believes Andrei Petrov from BKS World of Investments. Their presence on the stock market was previously quite difficult to imagine.
How to earn on IPO
High interest rate reduces investors' demand for shares, added Andrey Petrov. Now many of them prefer to keep money on bank deposits instead of investing in the stock market, as long as interest on deposits is high, said Natalia Milchakova from Freedom Finance Global.
- Participation in the primary issue of shares is a rather risky step, conservative investors more often pay attention to bond placements of highly reliable issuers," she said.
According to her, if the government creates conditions for private investors to trade on the stock exchange and not just hold securities in expectation of dividends, it may increase liquidity.
However, according to Andrei Stratichuk from Gazprombank Investments, in an environment of high interest rates in 2025, companies will continue to raise equity capital through IPOs, if investors have demand. At the same time, the interest of the latter will be influenced by the macroeconomic situation in general.
What will happen to the stock market in 2025?
The development of the stock market is supported by the authorities. Back in February 2024, President Vladimir Putin instructed to accelerate the launch of a special IPO regime for high-tech Russian companies in priority industries and to double the capitalization of the stock market by 2030 - it should increase compared to the current level and reach 66% of GDP.
In addition, the head of the Central Bank Elvira Nabiullina at a press conference following the meeting on monetary policy on December 20 said that she sees great potential for growth of the stock market through IPOs.
Chairman of the Central Bank of the Russian Federation Elvira Nabiullina
Earlier, the Ministry of Finance expected that from 2025 to 2030, about 20 companies a year will go on the stock exchange. Ivan Chebeskov, Deputy Minister of the Ministry, specified that about seven state-owned companies have already been selected for initial public offering.
However, as told "Izvestia" in the press service of the Moscow Exchange, the number of initial public offerings next year depends on how issuers will plan their activities. They specified: the platform sees its task in helping companies to enter the stock exchange - it interacts at every stage of the process of preparation for IPO.
