Duma committee calls for IPOs by regional cos to get Russian stock market cap back on target trajectory
MOSCOW. Oct 8 (Interfax) - The Russian State Duma's Financial Market Committee pointed to the decline of the Russian stock market's capitalization in its opinion on the draft federal budget for 2027-2029, which it approved on Wednesday, and proposed supporting initial public offerings by regional companies.
The committee's opinion on the bill (No. 615-9) has been posted in parliament's online database.
The committee recalled that one of the main goals of the state program for Management of Government Finances and Regulation of Financial Markets is to ensure that the Russian stock market's capitalization grows to at least 66% of GDP by 2030. However, the market's capitalization is falling, dropping to 19.5% of GDP at the end of August 2026 from 26.6% of GDP at the end of the first half of 2025, the committee said.
A comprehensive approach is needed to achieve the set goal, including regulatory incentives, improvements in companies' performance and greater interest from retail and institutional investors, the committee said.
"One of the avenues for growing the Russian stock market's capitalization could be to support regional companies in carrying out IPOs. One company per region is already 89 new issuers," the committee said.
According to the fact sheet for the Management of Government Finances and Regulation of Financial Markets program submitted to the Duma along with the draft three-year budget, the objective of increasing the Russian stock market's capitalization as a share of GDP is part of the Financial Market Development federal project, funding for which is not budgeted in the period to 2029. The department project Development of the Financial Market and Regulation of Financial Institutions and Financial Market Entities is set to receive funding of 5.72 billion rubles in 2027, 5.72 billion rubles in 2028 and 1.02 billion rubles in 2029.
The committee noted in its opinion that 99.7% of this funding is earmarked for Dom.RF subsidies to compensate banks for interest rates on credit holidays for participants in the special military operation.
The Finance Ministry said in September it was drafting amendments that would make it possible to take public companies in which regions held equity stakes.
"Regional governments are now actively looking at carrying out IPOs of companies that are owned by [federal] subjects, and are prepared to do this in the near future," the ministry's director of financial policy, Alexei Yakovlev said. But the law on privatization, which prohibits the sale of regional stakes in companies in organized trading, remains an obstacle to this, he said. The ministry plans to include this program in the federal project for developing the financial market.
The federal budget plan is scheduled for its first reading in the Duma on October 29.
