Since the beginning of the year, S&P 500 has grown by 18%, NASDAQ by 17% and MOEX by 27%. The growing pool of retail investors (the number of active MOEX accounts is close to 2.5 mln) is becoming an increasingly attractive factor for Russian companies to arrange IPOs at home and abroad. In fact, Russian companies have already raised around $3 bln through IPOs this year. New York has not seen so much activity from Russian issuing corporations since the first wave of the 1990s.
VkusVill
This pioneer of online grocery deliveries is planning an IPO in the United States in early 2022. It is estimated that the retailer may raise between $3 bln and $5 bln. The largest healthy food supplier and food technology company in Russia also comprises a network of cafes, mini stores and branded vending machines.
- A chain of 1,250 stores selling almost 2,500 items
- Monthly purchases: 12.4 mln
- 78% purchases paid with credit cards
- The majority of items, supplied by 1,100+ producers, are sold under the VkusVill brand
- Online orders account for 20% of all sales in 2020
- Revenue in 2020: RUB 114 bln ($1.6 bln, or 20 times more than five years ago)
- Net revenue: RUB 1.8 bln ($24.4 mln)
Delimobil (NASDAQ, MOEX)
Delimobil Holding S.A. from Luxembourg, a parent company of Delimobil, Anytime and Anytime.Prime car sharing companies, filed for listing and will be traded under the stock ticker of DMOB. The IPO parameters are not yet specified. Sources earlier reported that the company was expected to raise $350 mln.
- 18,000 vehicles and 7 mln registered customers
- Delimobil Holding S.A earned RUB 4.93 bln ($70 mln) (+119%) in H1 2021
- Delimobil short-term car sharing service accounts for 6% of the revenue, Anytime Prime long-term car rental accounts for 3.2% and other services 0.2%.
- H1 2021 net loss: RUB 1,170 bln ($16 mln) (-53.3%)
Delimobil is an example of a company of growth but its growth largely correlates with the development of the entire car sharing market. Risks include competition with existing and new services.
CIAN
Russia’s leading real estate listing and database was planning to have an IPO before the end of this year, with estimated raising potential of $350 mln. Reports started to change due to rumors that Avito might acquire CIAN. According to the latest data, the companies will not go through with the deal so it is too early to rule out an IPO. Available company data is scarce:
- Monthly visits to CIAN websites: over 21 mln
- 4 mln active real estate listings and 2.5 mln sales and rental listing ads in the database
- CIAN has not disclosed it financial data.
Positive Technologies
The company’s expected IPO is about to happen in late 2021 or early 2022. For 19 years, Positive Technologies has been developing innovative cybersecurity solutions, an area that has become extremely popular in the past couple of years. The company expects to raise funds from private investors, primarily from the IT sector. Its IPO model is uncommon: PT created a community of interested parties via a Telegram channel. The company’s extensive product line focuses on verifying and neutralizing actual business risks in the IT infrastructure of modern corporations.
- 80% of customers in Russia are included in the Expert 400 ranking; foreign customers include 2,000 corporations in 30 countries (e.g. Google, Huawei, Cisco, Microsoft, Oracle, SAP)
- Positive Technologies is a typical company of growth with steady profit. 2020 revenue: +41%. Net profit: +97%. EBITDA margin: 31%
- Estimated capitalization: $2.5 bln
- Risks: US sanctions (PT is under sanctions along with five other Russian IT companies)
Mercury Retail Group
This is an umbrella group that comprises Bristol and Red & White food and alcohol store chains. The company plans to raise around $2 bln through an IPO at MOEX. Mercury hopes to be evaluated at $20 bln.
- According to analysts, the aggregate share of Mercury’s two brands in the ultra-supermarket segment is 43% and around 4.5% of the total food retail market
- Both chains increased their sales by 20% in H1 2021
- More detailed parameters are required to estimate the potential success of IPO
Softline Group (MOEX, London Stock Exchange)
This Russian technology solution supplier with a headquarters in London specializes in digital transformation, cloud computing and cybersecurity. It is expected that the company will raise around $400 mln in the first round.
- Sales increased by 9% to $1.8 bln as of the end of the financial year
- Cloud services show biggest growth (47%), followed by software (12%) and software subscription (5%); the segments now account for 25%, 13.6% and 28.9% of the total sales, respectively
- Foreign sales increased by 45% of the 2020 figures
- Adjusted EBITDA: $52 mln
- Customer geography: 55 countries
- The price offering will be determined once the order book has been formed
Europlan
The company is a long-time leader among European car leasing services.
- The company’s owner, Safmar Financial Investments, plans to arrange an IPO in Moscow and expects to raise at least $300 mln
- IPO is planned for 2022
- Depending on circumstances, different IPO scenarios are possible, including a partial cash-in
By Ivan Kroshny, investor and entrepreneur