UBS: Russia Bracing For $10 Billion-Plus IPO Hubbub

Russia is anticipating a deluge of companies filing for an initial public offering (IPO) this year, an upswing expected to raise in excess of $10 billion, Reuters reported on Tuesday (March 16), crediting global financial services company UBS.

The IPO fundraise this year is anticipated to be the highest in Russia in more than 10 years, UBS told Reuters.

“This year could be best for equity raisings from Russia since 2007 given the global liquidity boost and the fact that Russia was overlooked and underinvested in the recent past,” Fedor Tregubenko, UBS Group country head in Russia, told Reuters.

GV Gold, a gold mining company in Russia, recently announced plans for an IPO. The Russian eCommerce firm Ozon was listed on Nasdaq in November 2020. Russian retailer Fix Price field for a public offering in London earlier this month, according to Reuters.

High dividend yields and exceptional growth rates have led to high valuations, with the combination attracting scores of investors, according to Tregubenko, whose bank is involved in numerous Russian IPOs, per Reuters.

“We expect to see at least $10 billion in IPO volumes from Russia this year in a wide variety of sectors ranging from retail to mining and the financial sector to IT,” Tregubenko told Reuters.

In 2020, IPO fundraising by firms in Russia notched below $2 billion as investors got cold feet while the coronavirus pandemic escalated around the world. The sentiment was also crushed by the possibility of new Western sanctions on Russia after kremlin critic Alexei Navalny was poisoned.

Ozon, an eCommerce behemoth that is considered to be Russia’s Amazon, filed paperwork in November 2020 calling for an IPO in the U.S. worth nearly $1 billion. The U.S. Securities and Exchange Commission (SEC) filing indicated that Ozon would extend 34.5 million shares on New York’s Nasdaq exchange at between $22.50 and $27.50 per share.

Since the start of 2021, startups in the U.K. raised close to $8 billion in funding following a record-breaking $15 billion fundraise last year. Five U.K. startups recorded valuations topping $1 billion from January through March of this year, almost as many in all of 2020.

In Brazil, 45 companies are looking to file IPOs in 2021, despite the economic uncertainty brought by the pandemic. During the first week of March this year, there were IPO filings by five companies — Rio Alto Energias Renováveis, Rio Energy Participacoes, Avenida, Infracommerce and Bionexo.