U.S., European investors drive demand for Detsky Mir IPO - Sberbank CIB
MOSCOW. Feb 8 (Interfax) - U.S. and European investors accounted for most of the demand for shares in Detsky Mir in the course of the Russian retailer's IPO on the Moscow Exchange .
The main selling shareholders in the IPO were Vladimir Yevtushenkov's Sistema JSFC and the Russia-China Investment Fund (RCIF), which was formed by the Russian Direct Investment Fund (RDIF) and China Investment Corporation. The order book for the IPO was closed on Tuesday evening.
"Detsky Mir's IPO was a classic deal on capital markets, the kind we saw before the geopolitical events at the beginning of 2014. This was apparent in everything, both in the number of bids that were submitted by investors and the geography of demand," Anton Malkov, the head of capital markets and managing director at Sberbank CIB, one of the organizers of the offering, told Interfax.
More than 80 bids were submitted for the company's shares, and the geography broke down as follows: investors from the UK accounted for about 35%, representatives of the United States for about 25%, investors from continental Europe for about 20% and Russian investors for about 10%, Malkov said.
The IPO was comfortably oversubscribed, with most of the demand coming from foreign funds, he said.
"The presence in this deal of the Russia-China Investment Fund, which acted as one of the selling shareholders, was an important factor in communicating with a number of investors," Malkov said.
RDIF said in a statement that Middle Eastern funds - its traditional partners - also bought shares in the IPO. According to the geographic data provided by Sberbank CIB, they might have accounted for up to 10% of the placement volume.
The placement will encourage other Russian companies to enter the public markets, he said. "We showed that investor confidence in Russian assets is growing and this should become a push for other companies to come out with IPOs," Malkov said, adding that Sberbank CIB was the only Russian bank to work on this deal alongside the largest foreign banks.
Detsky Mir was the first Russian IPO with a focus on foreign investors and active involvement by foreign organizing banks in the past three years.
