Page 67 - Russia OUTLOOK 2022

• IPO Boom
Russia enjoyed an IPO boom in 2021 with billions of dollars raised on the domestic and intl markets, and billions more of listings are in the pipeline for 2022 worth at least $10bn. 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 2021 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.
However, uncertainty over the pipeline re-appeared in October when talk of war with Ukraine resurfaced and the RTS sold off by some 20% by the close of the year. While few investors believe that the row will come to blows, many have moved to the sidelines until tensions subside again that may affect the prospects for IPOs in 2022. Still, most investment banks are predicting the stock market rally will resume in 2022 and provide a fecund background for more IPOs in 2022.
Growth stocks have been the favourite, many of them from the new economy like Russian e-commerce powerhouse Ozon, which raised $1.2bn in 2020. But increasingly new names are catching the headlines such as the hard discounter Fix Price, which raised $2bn in March 2021, 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. One of the most anticipated IPOs of 2022 will be the sale of Otkritie Bank that was nationalised in 2017 but has now not only recovered, but has become the fastest growing bank in Russia in 2021.
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