The software changed hands - Kommersant
Multiple subscriptions to shares of the software developer Arenadata group led to a significant increase in their price on the first day of trading. Unlike summer IPOs, the issuer showed greater transparency and flexibility in allocation. In addition, against the background of the recovery of the Russian stock market, the company paid more attention to private investors. However, portfolio managers believe that the market lacks more mature companies.
The first day of secondary trading in shares of the Arenadata group on the Moscow Exchange on Tuesday, October 1, was quite lively. In the first minutes of trading, their quotes reached 114.8 rubles, 20% higher than the offering price. Even though it was not possible to maintain the achieved height, the closing price was 106.94 rubles, exceeding the IPO price by 12%.
There hasn’t been such a strong finish to the first day of trading this year since the shares were placed in February. "Diasoft"which almost doubled in price at the moment, and at the end of the day, quotes exceeded the placement price by 68%. The IPOs of IVA Technologies, VI.ru, and Promomeda, which took place in June-July, showed much less good results in the first days of trading. But it is worth considering that those placements did not take place under the easiest conditions. From mid-May to early September, the Moscow Exchange index lost almost 29%, falling back below 2,600 points. However, by the beginning of October it had recovered part of the decline, closing on Tuesday above the level of 2800 points.
The rise in quotations for Renadata shares was facilitated by significant demand for the company's shares.
According to two Kommersant sources in the financial market, the order book was oversubscribed by 7–7.5 times, which is the best result since the MTS IPO (14.6 times). Allocation has also changed qualitatively. If, as a result of two July placements (VI.ru and Promomeda), most of the securities (about 80%) went to institutional investors, then when placing shares of Renadata, institutions received less than 50%, and private investors - 27%. According to the Moscow Exchange, the number of transactions amounted to almost 28.7 thousand, and the average share of satisfied applications from individuals was about 5%. In three management companies, applications were satisfied by 40–60%.
A distinctive feature of the current placement is the greater transparency of the allocation process. Anton Malkov, head of the capital markets department at T-Bank, notes that the Arenadata group took into account the wishes of the Bank of Russia and market participants, first disclosed information about the principles of allocation, and then provided data on the results of the distribution of securities. During the summer placements, such information was presented in a more dosed manner.
To maintain interest in the IPO from the general retail market, the issuer also established more lenient conditions for cutting off mass applications. Previously, companies most often did not satisfy the applications of those private investors who submitted more than five applications; this time the issuer raised the bar to ten applications. A representative of the Arenadata group explained this decision by the desire to maintain the level of secondary liquidity of securities by placing orders through a larger number of brokers.
Market participants also note an increase in requests from private investors to get acquainted with the investment prospects of the issuer.
Companies typically meet with portfolio managers several months before an IPO to introduce them to the business and gauge their attitudes. In the case of private investors, acquaintance usually occurs several weeks before the issuer goes public. “A prospective issuer needs to tell more about itself in advance, during preparation for the IPO, but it is important not to violate regulations,” notes EM managing partner Andrey Braginsky. According to him, two weeks between the publication of the prospectus and entry into the stock exchange are not enough to understand the company’s business and form an opinion to make an investment decision.
However, portfolio managers note that the market lacks more mature companies. “About half of the placements of the last two years were cases that were more suitable for private equity than for the public market. With high risk and difficult to predict income dynamics,” notes Kommersant’s interlocutor in a large management company.
