Mosgorlombard, a network of pawnshops including 17 locations in Moscow and the Moscow Region, intends to float its shares in early 2021, the company’s spokesperson told RBC.
Plans are in store to sell up to 20% of the shares, the company’s representative said. That could be the first such placement in Russia. However, experts warn that the move will not be an easy one.
“The pawnshop market is non-transparent for investors,” explains Ivan Uklein, Bank Rating Analyst at credit rating agency Expert RA. “Pawnshops, just like other microfinance institutions, carry enormous risks amid constantly tightening regulations,” the expert says.
“To attract large-scale funding, the reputation of the pawnshop market itself, its regulation, information transparency should take a few steps forward, and that will take considerable time,” he said.
Russia’s IPO market is facing hard times. The latest float was carried out by Globaltruck freight carrier in November 2017. Several companies, including the Rambler Group, announced their intention to float their shares but have not proceeded to do it so far.
There are no reasons to expect many Russian companies to float their shares, according to Pavel Samiev, head of analytical agency BiznesDrom.
“The market conditions are not conducive to that, while requirements for issuers are being tightened. On the other hand, every market has a player who believes IPOs are a better source of funding than other mechanisms of attracting investment,” he added.
