Russian biomedical plant Diod plans local IPO

MOSCOW, Nov 13 Courtesy (Reuters) – Moscow biomedical plant Diod is planning an initial public offering of shares in Moscow next summer, adding to a growing list of Russian companies hoping to raise funds amid a recovery in the IPO market.

A potential wave of flotations was kicked off by another biotech firm, Stem Cell Institute, which hopes to attract up to 165 million roubles ($5.76 million) from investors in what would be the country’s first IPO in more than a year.

‘We want to see how Stem Cell Institute fares… On international exchanges shares in (the biotech) sector are very popular, but in Russia – not yet,’ Diod’s General Director Vladimir Tihonov told Reuters.

Stem Cell Institute’s listing is to be followed by a London IPO of Russia-focused oil group Exillon Energy, sources have told Reuters, and a planned Hong Kong listing of UC RUSAL, the world’s top aluminium producer.

Investors who look beyond Russia’s main stock market and private equity players remain keen on technology companies which often capitalise on Soviet-era scientific prowess.
The Russian government is also keen to diversify the economy from natural resources after a price collapse in the second half of 2008 helped plunge the country into recession.

Tihonov said Diod, which makes biologically active additives among other products, was in discussions with banks about the possibility to raise about 500 million roubles ($17.44 million) in an IPO on a local bourse, likely MICEX, where it would float newly issued shares.

Diod, with annual sales turnover of 1.6 billion roubles, currently has more than 120 shareholders, but 70 percent of its share capital is controlled by three people who plan to retain their holdings in the company after the IPO, Tihonov said.