Trading in Mosgorlombard shares has begun

Attempts to keep Mosgorlombard’s quotes close to the IPO price at the first exchange trading were unsuccessful. At the end of the trading session, the price was 2.37 rubles, which is 5% lower than the IPO level. This placement turned out to be very difficult. The collection of applications was extended twice, and the volume of attraction was significantly lower than planned. In 2024, market participants will see new IPOs, including larger issuers. But high deposit rates will require deep discounts to the fair price.

The first trading in Mosgorlombard shares after the IPO on the Moscow Exchange took place without surprises. At the beginning there were attempts to play for growth, and quotes briefly rose to 2.6 rubles, but at the end of the trading session they stopped at 2.37 rubles. This result is 5% below the IPO price. So far the difference does not look significant – it is much less than, for example, in Henderson shares, which after almost two months after placement trading 19% below its IPO price.

Nevertheless, the last IPO of the past year turned out to be the weakest. “Mosgorlombard” twice endured collecting a book of applications, ultimately reducing the placement range by 20%, to 2.5–2.55 rubles. Based on the results of collecting the book of applications, the placement price was set at the lower limit – 2.5 rubles, and the volume of attraction only slightly exceeded 300 million rubles. At the beginning of the year, the Genetico company raised less than 200 million rubles, but it was targeting such a result.

Mosgorlombard planned to receive 0.5–1 billion rubles, but in the end only about a third of the shares offered for sale were placed.

Experts name several reasons for the low investor interest in the company. Capital Lab partner Evgeniy Shatov notes that not many of them are aware of how the pawnshop business works, “it is not always possible to understand the details, not everyone believes in the prospects of the business.” In addition, he clarifies, the day before the placement of Sovcombank took place, the interest of a large number of investors was directed towards it.

Independent financial analyst Andrei Barkhota adds that lowering the price range did not increase the investment attractiveness of MGKL, but only “provided a fundamental possibility of placing securities.” At the same time, Evgeny Shatov believes that “large companies are unlikely to take such risks.”

Overall in 2023 passed eight IPOs, more only in 2006–2007. In terms of the number of transactions concluded during placements (over 330 thousand), this year can be considered a record year. But in terms of the volume of funds raised – less than $0.5 billion – 2023 was inferior to many previous years, when one IPO could be many times greater than the current result.

Investment strategist of Arikapital Management Company Sergei Suverov emphasizes: the very fact that the IPO of Mosgorlombard took place “speaks of investor interest in new names.” Finam Financial Group analyst Leonid Delitsyn compares past placements on the Moscow Exchange with the American NASDAQ exchange in the Capital Markets segment, where placements of less than $10 million are now quite regular, and there are practically no large placements.

In 2024, the number of placements may exceed the 2023 figure. BCS expects up to 15 new initial offerings in 2024. Leonid Delitsyn believes that there will be more large placements – for example, Delimobil, Selectel and others.

At the same time, according to Evgeny Shatov, “the emergence of weak issuers is unlikely to have any significant impact on the IPO market.”

At the same time, Andrey Barhota clarifies, against the backdrop of high interest rates, new issuers will have to guarantee a higher return on investments in the instruments they issue, which implies, on the one hand, a clear discount at the time of placement, and on the other hand, justification for the advanced indexation of tariffs on goods issued by the issuer and services. In addition, according to him, in 2024, “investors will be more discerning in terms of the industry affiliation of new issuers.” A greater likelihood of success, the expert adds, will accompany issuers with a “proven history of import substitution and guaranteed government orders.”

Ksenia Kulikova, Dmitry Ladygin