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Russian tech firm Astra plans October IPO on Moscow Exchange

By Alexander Marrow

(Reuters) -Russian technology company Astra on Monday said it was planning to list its shares on Moscow Exchange this month in an initial public offering (IPO), potentially breathing some life into Russia's moribund equity capital markets.

At least 10 companies had been planning 2022 listings prior to Russia's February invasion of Ukraine, but sanctions on Russia's financial system and the exodus of Western bankers and lawyers has sorely limited share offerings.

Electric scooter firm Whoosh was the only Russian firm to hold an IPO last year, but its debut raised less than half its initial target and relied heavily on Russian retail investors for capital.

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Steel pipemaker TMK raised 4 billion roubles ($40.4 million) at a secondary public offering last month, while other companies have completed small listings in 2023.

Astra dominates Russia's operating system (OS) market with its Astra Linux software. It offers a range of software solutions to Russian government entities and state companies, including those in critical infrastructure, many of which were deprived of access to Western technology after Russia's invasion.

A source close to the company told Reuters that Astra had sharply increased its share of corporate clients to 70% in the first half of 2023 from 28% in 2020.

"Undoubtedly, the departure of Western vendors from the Russian market, the growing trend towards import substitution and technological sovereignty, and significant government support to the industry have had a huge impact on our business and the whole IT market," CEO Ilya Sivtsev said in a statement.

Astra did not say how much the company hoped to raise in the offering, but Sivtsev said the listing would create additional M&A opportunities.

Alfa Bank analysts valued Astra, which more than doubled its core earnings year on year to 5.4 billion roubles in 2022, at around 70 billion-90 billion roubles ($707 million-$909 million) in a report published on Monday.

The company said existing shareholders would offer shares in the placement, with the IPO expected to result in a free-float of approximately 5%.

Also on Monday, spirits producer Kristall said it was hoping to raise 1.5 billion roubles in a fourth quarter IPO on Moscow Exchange, something it said would significantly accelerate growth.

($1 = 98.9800 roubles)

(Reporting by Alexander Marrow, Editing by Louise Heavens, Kirsten Donovan)