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bne December 2021 Companies & Markets I 23
While Russia’s government spent a very modest 3% of GDP on stimulus the international market has spilled over into Russian stocks too, where the leading RTS index soared this year, gaining over 35% as international investors started bargain hunting. The RTS has been range bound, trading between 900-1,300, since sanctions were imposed following Russia’s annexation of the Crimea in 2014. But this year the index smashed two important milestones, rising to above 1,800 for the first time in a decade and briefly topping 1,900 at the end of October.
With US VC funds alone holding $260bn of free capital to invest the pool of available liquidity, this is enormous and an all-time high.
IPO driving the excitement
The ability to float is pulling in more VC funds to the Russian market. Leading e-commerce player Ozon IPO’d in December last year, initially hoping to raise $500mn but closing the deal with a $1.2bn valuation.
And the boom continues. In the first week of November during Russia’s latest lockdown, two Russian companies tried their luck on the American stock exchange: car-sharing firm Delimobil and online real estate company CIAN. These IPOs have only one thing in common: the management of both companies had problems obtaining American visas to travel
to the opening ceremony. But that's where the similarities end. Delimobil baulked at the offer price at the last moment and withdrew its IPO, whereas CIAN persuaded investors to buy
at the upper end of the offer price range and closed the deal.
Delimobil largest shareholders, Italian Vincenzo Trani and VTB Capital (VTBC), announced at the end of October that it was going to sell 20mn American Depository Receipts
bne:Deal
(containing two local shares per receipt) at $10-12 per share that would give the company a valuation of $760-912mn.
The order book closed on the evening of November 2, but the next day Interfax, citing sources, said that the deal had been delayed due to a dialogue with "additional" investors and it was later reported that the order book was oversubscribed. On November 4 the company announced that it had decided to postpone the deal to early 2022, citing market conditions. One of the difficulties was that investors perceived Delimobil more as an advanced version of good old car rental than a tech play, a market source who followed the placement told The Bell.
By contrast, CIAN managed to convince investors it was an innovative tech play that enables users to rent and buy real estate online without the need for brokers. Investors highlighted both the scale of the business of the company, which is one of the ten largest real estate services in the world by audience. CEO of the company Maxim Melnikov told The Bell: “Buying real estate is always a very exciting moment, our mission is to make [it] so that for our clients this process is as convenient and fast as possible."
More recently the company added the possibility of taking out mortgages from one of Russia’s eight large banks, expanding its service to cover the complete transaction, including the funding. The whole real estate purchase and sale transactions can all be concluded online. “It makes life much easier if
the buyer is, for example, in Novosibirsk, and the seller is in Sochi,” explains Melnikov.
Investors valued the company at $1.1bn, at the top of the announced price range of $16 per receipt. Trading in the company's securities opened on the NYSE the next day with gains in the share price.
As lira carnage mounts BBVA moves to snap up rest of Turkish bank Garanti
Akin Nazli in Belgrade
Spain-based BBVA (New York; Madrid; Mexico/BBVA) will apply to Turkey’s capital markets board (SPK/CMB) to hold a voluntary tender offer to buy the 50.15% of Garanti BBVA (GARAN) bank that it does not own, Garanti said on November 15 in a filing with Borsa Istanbul. The move takes advantage of the latest severe depreciation of the Turkish lira (TRY) that has brought the currency beyond 10-to-the- dollar for the first time ever.
BBVA plans to pay up to TRY 26bn (€2.25bn) if all shareholders participate in the tender offer. Its offer will be TRY12.2 per share for a stake nominally valued at
TRY2106.3mn. That represents a premium of 15% over the market price recorded at the end of last week.
Garanti operates with a paid-in capital of TRY4.2bn and BBVA currently holds a stake nominally valued at TRY2,903.7mn.
BBVA said in filings with stock exchanges where its shares are traded that it intends to complete the deal in Q1 2022.
Garanti shares stood at TRY10.58 at market close on November 12. They jumped 10% on November 15.
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