why early placement is becoming popular

The active participation of private individuals in initial offerings forces issuers entering the stock market to adapt to their requirements. Thus, the Crystal Alcohol Group (AGK), which is currently conducting an IPO, has reduced the deadline for collecting applications by a day. Market participants note restrained interest in the company’s securities on the part of institutional investors. But retail investors may well provide the necessary demand even against the backdrop of industry risks and analysts’ doubts about the fairness of AGK’s assessment.

AGK decided to close the book of applications for the IPO a day earlier than planned – on February 21 instead of February 22 – due to “high demand, which was reflected in the volume of applications.” The final price will be announced on the morning of February 22, and trading is scheduled to begin on the same day. Previously, the start of exchange trading was scheduled for February 26.

Closing the IPO book early is in vogue this year. Diasoft, which floated this week and faced a rush of demand from investors, has also reduced the time it takes to submit applications (see “Kommersant” dated February 9).

At the same time, the situation at AGK is somewhat different.

A Kommersant source on the market says there is demand for AGK shares from retail investors, who may be attracted by the issuer’s industry, and assumes that the company will receive the necessary capital.

Investment strategist at Arikapital Management Company Sergei Suverov believes that investors can be attracted by “ambitious, passionate management, profitable growth, and a clear brand diversification strategy.”

At the same time, institutional investors are reserved towards the issuer. The three portfolio managers running the equity funds do not intend to participate in the offering. They note that the alcohol industry is heavily regulated and opaque, and the volume of placement for a normal stock portfolio is very small. “You don’t want to enter it with an anchor and get stuck,” explains one of Kommersant’s interlocutors.

Alexey Kurasov, head of the corporate finance department of Finam Financial Group, adds that there are regulatory risks with regard to AGCs – “the requirements for low-alcohol drinks have now been tightened, but this tightening cannot be ruled out for the middle and “above average” segment.”

Go Invest points out that Kristall does not have “open reporting under IFRS that could reflect consolidated results.”

“Plans to increase revenue by five times, EBITDA by ten times, and net profit by 22 times by 2026 look simply unrealistic. An increase in market share from 2% to 18% by 2026, even against the backdrop of import substitution of departed brands, also seems overly optimistic,” says Sergei Shemyakin, head of the portfolio solutions department at the investment company.

Aygenis Investment Company believes that, taking all this into account, the company’s stated valuation is 2.5 times higher than its fair value: “It’s strange when a distillery company is placed at a multiple closer to IT.” Finam is more optimistic and believes that in a year the fair value of AGK will be 10.5 billion rubles. “This means a growth potential of 20–40% over the range proposed by the company,” explains Alexey Kurasov.

As a result, investors differ widely on the prospects for IPOs. The investment company Digital Broker estimates that oversubscription will be minimal. However, Andrey Petrov, director of customer relations at BCS World of Investments, believes that there will be demand and “many investors” will take part in the IPO. According to Sergei Suverov, Kristall shares will be located at the upper limit of the range.

Ksenia Kulikova, Vitaly Gaidaev