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ALTERA FINANCE assessed the IPO prospects of Ukrainian companies

 

20 Oct, 2010

An aggregate volume of investment, raised from IPO by Ukrainian companies in the first quarter of 2010 and in the year 2011 may be up to 600-700 million USD. They will be attracted, first of all, by the agricultural and food industry companies. This forecast has been made by the project manager of the ALTERA FINANCE IG Andrey Prihodko.

He stressed, that IPO of Ukrainian agricultural companies attracted a special interest of investors in the period of 2009-2010 after the crisis. As opposed to the other sectors the agriculture developed during the crisis.

However, in the year 2012 as the economics will recover some other companies will make an IPO, among which oil product market, energy sector, telecommunications, possibly mining and metallurgical complex and retail may be attractive to investors.

With all that mentioned the major companies, operating income of which should be no less than 10 million USD, or preferentially, from 30 million USD can count on the investment attraction. The investors expect that all the funds, raised during an IPO should be used for the company’s development.

IPO has a number of benefits for Ukrainian companies’ owners. Thus, IPO gives the highest business valuation, however an owner, even after having sold 50% or more on the stock market, has the full control of a company, since instead of one major investor there will be hundreds of small stockholders in the corporate capital. However, IPO, in its turn, requires a maximum transparency for the investors, renunciation of semi-legal business schemes.

The total amount of IPO funds, attracted by Ukrainian companies since 1991 till now is about 3.5 billion USD. It is about 8.5% of the total volume of foreign direct investment. At the same time the cumulative volume of investment, raised during an IPO by Russian companies during the same period is more than 20% of the total volume of foreign investment into Russian economy. Thereby, the chances that this tool of capital formation is underestimated by Ukrainian companies, and consequently, the IPO market development prospects for the nearest future are very optimistic.


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