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Sova Capital Sees Rise of Small- to Mid-Cap IPOs in Russian Markets

15 Dec 2021

Sova Capital anticipates an abundance of placements from small and mid-cap issuers in the coming years as outlined in a detailed report today analyzing the past, present and future of Russian equity capital markets (ECM).

Alina Sychova, Head of Capital Markets Origination at Sova Capital, comments:

“Although some large industrial enterprises – such as SIBUR and Metalloinvest – are still to go public, the Russian ECM market will continue to flourish before and after these companies list. The larger deals were accelerated by the global push toward e-commerce and digitalization during the past couple of years, and smaller issuers will be driven forward by that same continued momentum.”

In addition to providing a comprehensive overview of the history of Russian ECM, the report – authored by Alina Sychova, Head of CMO and Georgy Lolaev, Associate – outlines how the Russian domestic market infrastructure continues to evolve and mature. 2021 marks the first year since 2007 when IPOs have accounted for more than half of total ECM issuance and momentum appears set to continue into 2022, with as many as a dozen Russian companies said to be seeking public status.

Russian companies have raised almost USD 4 billion in IPOs in 2021 with listings on Moscow Exchange (MOEX), the London Stock Exchange (LSE) and in the US. Continuing a trend of recent years, all Russian IPOs this year have had a Moscow component, with many listing solely on MOEX. Whereas the majority of IPOs before 2015 took place outside Russia, since 2016 50% of all listings have been MOEX-only.

Other key findings of the white paper include:

  • Although Russian ECM tend to be conservative about embracing new equity instruments, there has been considerable interest from entrepreneurs in SPACs, creating a unique opportunity for investors
  • The expected growth of smaller issuers in Russian ECM will require a different approach to transaction execution with increased focus on investor education and a considerable human resources allocation to effectively communicate the issuer’s investment case
  • Geopolitical events of 2000 and 2020 have both lured retail investors to capital markets, and in the short term, the current influx will generate valuable additional demand in ECM transactions, however, inflation will ultimately determine the long-term impact of retail investors on ECM


The full report is available here: