28 Aug 2023 11:40

Moscow Exchange to develop pre-IPO platform by year's end

MOSCOW. Aug 28 (Interfax) - The Moscow Exchange is developing a pre-IPO platform and the first offerings on it could take place at the end of 2023 or beginning of 2024, the director of the exchange's equities market department, Boris Blokhin said.

"After we launched the service to carry out transactions with shares without a listing on the over-the-counter market, we received a large number of requests from companies that would like to raise equity capital at the early stages. For a number of reasons they are not ready for a listing right now. Often these are companies in the technology sector that want to put everything into developing the business," Blokhin told reporters.

"By the end of the year we will develop a technological option for raising equity capital. This will essentially be a pre-IPO market," he said.

Transactions will be carried out through brokers, said. Companies that intend to opt for a pre-IPO will have to find a broker who is prepared to offer their shares to investors.

"At this point we're proceeding on the premise that we would like to offer investors a certain selection or at least expectation that a company will enter the market for raising capital. What is the reason for this? Firstly, this is a possibility for diversification. In a pre-IPO, obviously these are riskier instruments than companies that are going for a listing. In terms of the possibility of investing in several companies, this makes it possible to reduce risks, and on the other hand offer better terms for investors," Blokhin said.

He estimated that such pre-IPO rounds could amount to 100 million-300 million rubles. "These are not such huge amounts, but this gives investors an opportunity for diversification and introduces variety to stock market instruments," he said.