The recent rash of Russian companies canceling stock market listings is no cause for concern, the head of Europe for VTB Capital, the investment arm of Russian state-owned VTB Group, said in an interview with RIA Novosti on Tuesday.
Moscow's Domodedovo Airport dropped its planned initial public offering (IPO) in London on Monday over possible concerns that investors were put off by a dispute between the airport and the Russian government.
"IPO withdrawals are not unique to Russia," Vladimir Sokolov said at the VTB Russia Calling investment forum in London. "It happens everywhere around the world."
The cancellation followed a successful offering of Moscow's most popular Internet search engine, Yandex, last week. The owner of the search engine raised $1.3 billion in the IPO, listed on the New York stock exchange.
The offering's success raised hopes of increased confidence in Russian companies after the cancellation of five IPOs in London this year because of disappointing public demand.
Nord Gold NV, OAO Koks, Chelpipe and Euroset Holding NV have all pulled planned IP0s citing unfavorable market conditions. OAO Russian Helicopters postponed its listing in London and Moscow in May. Another four companies held successful listings, raising a combined total of $2 billion.
Analysts say Russian issuers have gained a reputation for overvaluing their shares in London and for the stocks to then underperform the stock market.
During the opening session of the conference, VTB President Andrei Kostin warned Russian companies against holding IPOs until they are fully prepared to enter the market.
"Only those companies who have a really good profile and are really ready for the market have a good chance to be successful on the international market," Kostin said. "Any company holding an IPO has to do a lot of preparatory work; the conditions are not the same as they were three or four years ago."
A 10 percent stake in VTB, Russia' second largest lender, was successfully sold off in February, raising $3.3 billion. Analysts said the sale boded well for future offerings, most notably the sale of a 7.6 percent stake in government owned Sberbank scheduled later this year.
DME limited, which runs Domodedovo International Airport, Russia's largest airport, had hoped to raise $700 million to $1 billion from the June listing on the London Stock Exchange.
Analysts said on Monday that potential investors may have been deterred by a government probe into a suicide bombing at the airport that killed 37 people in January.
DME Chief Executive Officer Denis Nuzhdin said in a statement the company was postponing the IPO because it was "not satisfied that a fair valuation could be achieved in the current market conditions."
LONDON, May 31 (RIA Novosti, Natasha Doff)
