SPOs of the Russian Public Companies

Student: Shpileva Maria

Educational Programme: Strategic Corporate Finance (Master)

Year of Graduation: 2018

Secondary public offering (SPO) is one of ways for company to attract funds. Last time it become more popular between Russian issuers: in 2017 the number and amount of deals exceeded the previous figures by more than 3 times. Comparing to IPO, SPO deals have significantly different amount of undervaluation and different long-term ROE, so it can be considered as an independent financial instrument. In this paper we analyze the behavior of share prices of Russian public companies that conducted additional placement of shares and identify features inherent in the Russian market of secondary public offerings. We found out that SPO of Russian companies have some features. An undervaluation of equity during SPO of Russian companies is higher than for companies in the case of the developed countries. The type of industry significantly affects the undervaluation. The IPO effect also has a negative effect on the long-term ROE of Russian public companies and it is bigger than SPO effect.

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