The decision by Russian pig iron and coking coal firm Koks to suspend its London IPO may be a signal for other local companies preparing flotations to curb their appetite, analysts told RIA Novosti on Monday.
On Friday, Koks said it had postponed its $500 million IPO in London, where it wanted to sell about 8% of its shares, citing unfavorable market conditions. Investment bankers say they do not expect Koks to reopen the IPO in the next six months as it has received a one billion ruble credit line from Raiffeisen bank.
Russia's Chelyabinsk Tube Rolling Plant (ChTPZ), Nordgold, a subsidiary of Russian largest steel producer Severstal, and Hydromashservice machine-building holding company plan to hold an IPO in the next few days.
"I believe, the postponement of Koks' IPO may have a negative impact on the flotation by ChTPZ, whose bid book is closing on Wednesday and Nordgold, whose bid book closes on Friday, and, all in all, it can have a negative impact on Russian securities," said Uralsib analyst Dmitry Smolin.
"ChTPZ and Nordgold were initially valued highly, because shareholders wanted to sell their stakes expensively, but investors do not like it. I think these companies will either have to reduce the price range or postpone the IPOs," he added.
A market source close to Nordgold told RIA Novosti the company was not going to give up its IPO plans, while a ChTPZ spokesman said the company was continuing its road show and declined to comment further.
"The decision to postpone the London IPO will affect market sentiment negatively in the whole segment of metals shares," ITinvest-Prospect Chief Analyst Alexander Potavin said.
Renaissance Capital analyst Boris Krasnozhenov said the Koks IPO was affected by two factors.
"The first factor is company valuation. One has to understand that Koks is not fully integrated into the coking coal segment and produces coke and pig iron - they are an intermediate link in the value-added chain in the metals sector," he said.
"The second factor is that the company did not need to raise money at any cost at the moment on the stock market."
MOSCOW, February 7 (RIA Novosti)
