The owner of CarMoney, a Russian firm focused on offering secured car loans, launched a direct listing on the Moscow Exchange on Monday (July 4, 2023) in a capital raise that valued the business at roughly 6.3 billion roubles (or the equivalent of $70.7 million).
In a direct listing a firm provides shares to the public without moving forward with a bank-supported initial public offering (IPO).
Western-led sanctions and Russian countermeasures have cut Russia‘s financial markets off from Western capital since Moscow made the decision to send troops to Ukraine back in February 2022.
Since that time, there have been several relatively small listings, howecver, electric scooter firm Whoosh was reportedly the only Russian business to carry out an initial public offering (IPO) in 2022. Its entry managed to secure less than half its initial target and relied on Russian retail investors for acquiring capital.
SmartTechGroup (STG), which owns CarMoney, carried out a direct public offering (DPO) at 3.15 roubles per share. By 0910 GMT, shares had reportedly been trading at 3.32 roubles per piece.
STG now intends to provide additional shares in phases, modifying the volume and price each time.
The complete offering may be worth 600 million roubles and the free float is currently expected to reach 11%. Its initial valuation is expected to fluctuate as additional tranches are introduced.
CarMoney founder Anton Zinoviev stated that a traditional IPO was too costly for such a small volume, while noting that market conditions would be unlikely to make an IPO profitable for the shareholders.
Russia’s benchmark stock index currently trades significantly below levels witnessed prior to when Moscow started what it refers to as a “special military operation” in Ukraine and Russian assets are prone to considerable volatility.
However, the Moscow Exchange expects as many as 10 share placements during 2023, even if deals happen to be substantially below the multibillion-dollar ones that Russia was accustomed to.