IPO of MFC Seimer may take place in the coming months

MFC Seimer, one of the largest microloan markets, is ready to conduct an IPO in the first quarter of 2024. The company expects to raise RUB 5 billion. mainly from individuals. To attract them, the IFC may promise to pay up to 50% of net profit in the form of dividends. Experts note that the microfinance industry in general and Seimer in particular currently do not have too many arguments to attract investors.

The initial public offering (IPO) of MFC Zaimer (according to Kommersant’s estimates, the largest company in terms of interest income, 15.3 billion rubles for the nine months of 2023) could take place before the end of March, Kommersant sources familiar with situation. In particular, according to one of them, the company is “technically ready for placement and is only waiting for the right window.” According to Kommersant’s interlocutors, the IFC expects to raise 5 billion rubles. (Reuters sources cited the same amount), up to 90% of which will come from individual investors. The IFC itself does not comment on plans to enter an IPO. They noted that the company “always considers various strategic development options.”

To attract citizens, the company promises a generous dividend policy, notes one of Kommersant’s interlocutors; Seimer plans to allocate up to 50% of net profit to payments to shareholders. Based on the results of January-September 2023, the net profit of Seimer according to RAS amounted to 5 billion rubles, an increase of 2.5 times compared to the same period last year. The company did not disclose financial statements under IFRS.

“Zaymer has a clear capital surplus – 80-90% of the funding structure comes from its own funds – and one of the lowest debt ratios in the industry,” emphasizes Managing Director of Ivolga Capital Dmitry Aleksandrov. “I would expect a cash out transaction format, since its own ability to generate capital must meet the needs of the business.” The money can be used for mergers and acquisitions and for an employee motivation system, one of Kommersant’s interlocutors believes, for this a “live quotation” is necessary.

Seimer can be valued at 6–8 profits, that is, approximately 40–60 billion rubles, believes Dmitry Alexandrov. “With this estimate, raising 5 billion rubles. sounds like an achievable goal, but closer to the high end. Considering that the index is still flat, it will be difficult to attract large volumes,” he says.

The investment community is still cautious about future placements. “Success will depend more on the availability of money and enthusiasm among investors than on the company itself,” explains Finam FG analyst Leonid Delitsyn. “Cash out to founders, mergers and acquisitions, employee motivation cannot be called strong attractiveness factors. Investors are more interested in companies that earn innovation rent, that is, are highly profitable due to the fact that they entered the market early with a product that others do not have.” In markets where barriers to entry are not very high and the number of competitors is large, the expert adds, investors “think about how long companies can remain profitable.” To attract them, Mr. Delitsyn believes, the company has to “do a lot of work.”

The last IPO of the year was also not very successful in the financial sector. Mosgorlombard postponed the collection of the order book several times, eventually reducing the placement range by 20%, to 2.5–2.55 rubles. In the end, Mosgorlombard, which planned to receive 0.5–1 billion rubles, ultimately placed only about a third of the shares initially offered for sale (see Kommersant, December 28, 2023).

In the case of Seimer, the risk of a decline in profits of the microfinance industry in 2024 against the backdrop of continued tightening of regulation may raise doubts among potential investors (see “Kommersant” dated January 9 and November 21, 2023).

On the other hand, the same tightening of regulation “inevitably contributes to the fact that microcredit comes into a more civilized framework,” notes Vasily Kutin, director of analytics at Ingosstrakh Bank. And the overall investment attractiveness of the segment, in his opinion, “is still higher than that of the traditional banking sector.”

Polina Trifonova, Vitaly Gaidaev