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Few Russian companies have done foreign IPOs, and even fewer have issued domestically. That looks set to change in the next 12 months. Investors should expect more diversity, some big winners - and one or two unpleasant surprises.
NEXT YEAR, HOLDING company Sistema plans to raise between $1 billion and $2 billion through a Russian and London global depositary receipt listing of a 20% stake. It's likely to be the biggest Russian IPO so far. The company owns stakes in telecoms company MTS, insurance company Rosno, Moscow mobile company MGTS, and several other companies in the consumer sector. Morgan Stanley and CSFB are advising on the listing. The company declines to comment on it.
In the real-estate sector, Open Investments, a company owned by oligarch Vladimir Potanin, is planning to list early next year in Russia before beginning trading in GDRs in London. ING is the adviser.
In the metals sector, Mechel Steel was pricing its American depositary shares on NYSE as Euromoney went to press. It is expected to raise about $270 million. Aluminium company Sual is also slowly preparing for a London, as is Evraz, Russia's biggest steel company. Those two could come to market in 2006.
Some 20 to 30 Russian companies have been mentioned in connection with potential IPOs in 2004-07.
Scott Semet, head of equity research at MDM, says: "Several resource companies want to list now while commodity prices are so high." He thinks Novatek, Russia's second-largest gas company after Gazprom, could also list in 2006 or 2007.
Several companies in the consumer sector plan to list. In October, beer company Efes Breweries listed a stake in its international arm, mainly made up of Russian assets, in GDR form on the London Stock Exchange, raising $173 million. Retailer Sedmoi Kontinent is planning a Moscow listing of a 20% stake this year. Next year, Cherkizovsky Meat Factory, United Confectioners, fruit juice company Nida and retailer Kopeika could all come to market.
Rambler, the largest internet portal in Russia, is also planning a listing on London junior market AIM in the next few months. This would be the first Russian company to list on AIM, although several companies with mainly Russian assets are already on it.
Some financial companies also say they...