The Russian stock market lacks investment bankers; first of all, we are talking about specialists who prepare issuers for the initial public offering of shares, Vedomosti writes. Kommersant FM’s interlocutors confirm the trend and attribute this to the fact that since 2023, the demand for IPOs among Russian companies has sharply increased. But due to a shortage of personnel, specialists do not have enough time to work with all candidates. How pressing is this problem? And how can it affect the volume of placements on exchanges? Vladislav Viktorov talks about this.
Back in 2021, 25 investment banks took part in the placement of securities of Russian companies. A year later, 11 international structures left the market, including such giants as Goldman Sachs and JPMorgan. But if in 2022 only one company risked going public, then in 2023 there were eight of them.
And during this period, preparation for an IPO became a serious challenge for investment bankers, since due to the outbreak of hostilities in Ukraine, there were fewer experts on the market, and the workload increased. This is despite the fact that previously only one Russian bank was in the top 7 placement organizers by transaction size. Now everyone else has a hard time catching up, noted Sergey Novikov, partner of the GRM consulting group:
“There is a serious shortage of investment bankers and underwriters to carry out this procedure. The situation is indeed very difficult for specialists in terms of workload. On the other hand, when there is work, it’s always great.
I think that such competition will allow, firstly, to increase the competencies of our investment bankers, and, secondly, to bring more interesting projects to the market.”
Vedomosti’s interlocutors from Tinkoff Investments also see advantages in this situation. Although they admit that due to the workload, specialists have their vacations cancelled, simply because otherwise there will be no one to run the company. Therefore, the market is thinking about reviving the so-called school of issuers, which was launched by the Moscow Exchange and Skolkovo in 2020. This will allow experts to improve their skills and bring new specialists to the market.
Moreover, according to government forecasts, 11 companies plan to enter the stock exchange this year. However, Ivan Sergeev, partner and investment director of CB Partnership, notes that few people have always agreed to such work: “When a company goes public, the investment banker has to delve into the management and financial reports for the last few years.
Here we do not have any common denominator. Each player goes through a unique path, there are companies that are absolutely transparent, but this cannot be said about everyone. Some companies are structured quite strangely.
And in order to bring them to the stock exchange, of course, the investment banker has to give a number of recommendations and help correct the statements. Therefore, the team’s labor costs differ from case to case.”
At the same time, Moscow Exchange stated that more than 20 initial placements could occur in 2024. And in general, even such plans are quite feasible, but due to the shortage of personnel, the quality of such IPOs will not be very high, the managing director of Trade123, Vladimir Rozhankovsky, fears: “Such specialists simply physically do not have enough resources and time to lead the company at the first stage when it’s hardest for her. IPOs will most likely take place, but their quality will steadily decline throughout the year.
Companies will place themselves and assume that the market itself will somehow raise quotes, write reviews of players, and research them itself. And the companies themselves may not even provide the minimum required information that, by the way, they sign.”
At the same time, investors are now especially ready to invest in Russian companies. This is also indicated by the fact that, for example, almost half securities of the Delimobil service during the initial placement It was the retail players who bought it. However, a shortage of experienced investment bankers and, as a consequence, a decrease in the quality of placements can lead to disappointment among investors. And as a result, there will be no IPO boom.
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