Arenadata IPO priced at upper end of range, values co at 19 bln rubles
MOSCOW. Oct 1 (Interfax) - PJSC Arenadata, a Russian data storage and analysis software developer previously known as ADS Holding, set the price for its initial public offering on the Moscow Exchange at 95 rubles per share, the company reported.
This is the upper end of the announced price range of 85-95 rubles per share and corresponds to a market capitalization of 19 billion rubles for the group.
The offering will total 2.7 billion rubles, including the stabilization shares, the company said.
Current shareholders are selling 28 million shares in the IPO, including 2.8 million shares that can be used to stabilize the price in secondary trading for up to 30 days after trading starts. The company itself is not raising any funds.
Following the IPO and until the end of the stabilization period the company's free float will be 14%.
Institutional investors received 57% of the allocation, 27% went to retail investors and 16% to partners of the selling shareholders.
The company and its shareholders committed to the standard lock-up obligation for 180 days from the start of trading.
Trading in Arenadata Group shares on the Moscow Exchange began at 4:00 p.m. on October 1 under the DATA ticker. The shares rose 10.4% soon after trading began.
"We held the IPO amid increased volatility on the stock market and thank all investors who took part in the share offering on the exchange for their trust in Arenadata Group," CEO Maxim Pustovoi was quoted as saying. "The offering was oversubscribed multiple times at the upper limit of the price range, once again confirming the IT sector's appeal to investors, and our first IPO of the autumn season opens a window for the issuers that follow," he said.
The company's share capital might be increased in time. Arenadata Group began registering an issue of preferred shares in September. Some of these shares - 2.35% of the target capital - would be used for the long-term employee incentive program. The shares might be converted into ordinary shares after January 1, 2026, at a ratio of 1:1.
Another 11.65% of the capital in the form of preferred shares will be used to convert shares of minority participants in the group's operating companies into Arenadata Group shares.
"This conversion will be economically neutral, and it will be possible to consolidate the dividend flow of the group's assets at parent company level," the company said. "If a decision is reached to convert shares, minority participants will assume obligations just as stringent as those of the selling shareholders, to restrict the disposal of shares from the moment they are received."
It emerged in the spring of 2023 that Arenadata might be getting ready for an IPO. Pustovoi became CEO of Arenadata Software, later Arenadata Group at the time. Pustovoi had also worked for Positive Technologies . Sources familiar with the company's plans have told Interfax that his experience could be useful to the company in the context of preparing for a potential IPO.
JSC Arenadata Group became a PJSC in August this year in preparation for the IPO.
Arenadata has said its revenue to International Financial Reporting Standards rose 58% to 4 billion rubles in 2023. OIBDA grew 84% to 1.7 billion rubles and the OIBDA margin rose 6 pp to 42%. Net profit grew 50% to 1.5 billion rubles.
Revenue grew 2.2-fold to 2.3 billion rubles in H1. OIBDA totaled 601 million rubles and net profit was 608 million rubles.
The company said its customer base had grown rapidly. It had 49 corporate clients at the end of 2022, rising to 102 by the end of 2023 and 115 by the end of H1 2024. TBank said in an analytical report in September that Arenadata Group was predicting six-fold growth in the number of customers in the medium term. To achieve this the company plans to double its partner network and direct sales department.
Arenadata Group also expects an increase in cross-sales of its products: starting with one product, customers gradually increase the number of its products, order additional functionality, and purchase technical support services. At the end of 2023, the average number of products per customer was 2.4. The top 10 customers had 3.9 products.
The company plans to develop and expand its product portfolio, including with box solutions and cloud products. The group will promote the latter in the SME segment, among others.
The company says its financial position enables it to pay regular dividends. Arenadata allocated 545 million rubles for dividends in 2022, 892 million rubles in 2023 and 1.4 billion rubles in 2024. Dividend policy is to pay at least 50% of adjusted net profit.
TBank predicts that Arenadata Group will increase both the volume of dividends and dividend yield in the medium term: it estimates the group has paid 1.4 billion rubles this year, implying dividend yield of 3.1%, but that 5 billion rubles might be paid in 2028 implying yield of 10.8%.
The group's product portfolio includes about 10 data storage and processing solutions, including a proprietary data base management system. The Center for Strategic Research estimates this market at 67 billion rubles by the end of 2023. It is expected to grow to 234 billion rubles by 2030.
"The Russian DBMS market is expected to significantly outperform the IT market as a whole," CSR Deputy General Director Ekaterina Kvasha has said. "The DBMS market's average annual growth rate for 2022-2030 is about 20% compared to 12.5% for the entire IT market," she said.
It is assumed that the market growth will be driven solely by sales of the products and services of Russian software developers. Russian vendors accounted for only 36% of the market in 2021, rising to 82% by the end of 2023 with their share set to grow to 99% by 2030.
The Arenadata Group currently consists of seven companies, among them Arenadata Software, Ridus Data, Picodata, Clean Data, DataCatalog, Tera Integro and a service center. JSC GE Invest owns 73.67% of shares and TC Centre LLC, part of the T1 IT holding, owns 26.33%,