(Adds banker’s comment, detail)
By Andrey Ostroukh
MOSCOW, Sept 27 (Reuters) – Renaissance Insurance Group said on Monday it plans to list its shares on the Moscow Exchange and raise up to $290 million in an initial public offering (IPO), riding Russia’s emerging IPO wave.
Russian IPO activity, hit by the COVID-19 pandemic last year, is picking up pace as the economy improves and concerns over fresh Western sanctions fade. The Moscow Exchange expects to hold 10 share listings by the end of the year.
Renaissance Insurance plans to raise up to 21 billion roubles ($289 million) in an IPO that would make it Russia’s first listed insurance company, it said in an intention to float statement.
Other Russian companies including real estate database CIAN, car sharing firm Delimobil, IT company Softline, food retailer Vkusvill and the Saint Petersburg Exchange are also preparing IPOs, sources have said.
Russian companies are optimistic, a Russian investment banker said, even though some funds point to the risk of a downside correction in equity prices as U.S. and Russian stock indexes are close to record highs.
Renaissance Insurance, among the 10 largest insurers in Russia, said it is also planning a secondary offering of existing ordinary shares by some shareholders.
The company intends to pay out at least 50% of consolidated net profit in dividends, it said, after posting a nearly 15% rise in net profit to 4.7 billion roubles in 2020.
The statement confirmed an earlier Reuters report that Renaissance Insurance, founded in 1997 and run by Boris Jordan, was considering listing in Moscow this autumn.
The IPO proceeds will be used to accelerate organic growth, investments in digital initiatives, potential acquisitions and the possible repurchase of the listed shares, the company said.
Renaissance Insurance says it relies heavily on digital technologies, such as artificial intelligence (AI), which are set to help expand its presence in Russia.
The company did not provide the exact timing for the IPO or give details of possible acquisition targets.
The IPO also marks a milestone for online bank Tinkoff, which will act as an IPO organiser for the first time as it strives to grow its equity capital markets business.
Other joint bookrunners include BCS Global Markets, Renaissance Capital and Sberbank, while Credit Suisse, J.P. Morgan and VTB Capital are also acting as joint global coordinators.
($1 = 72.5975 roubles) (Reporting by Andrey Ostroukh, additional reporting by Olga Popova, Katya Golubkova, Alexander Marrow and Maxim Rodionov Editing by Louise Heavens and Mark Potter)