FOCUS: Astra IPO success as investors hunt import replacement stocks

By Yekaterina Yezhova

MOSCOW, Oct 23 (PRIME) -- IT firm Astra Group’s shares spiked by nearly 70% in heavy trading in the two days after the October 13 floatation reflecting investor appetite for a company that profits directly from imports replacement.

“Astra’s initial public offering (IPO) was one of the most successful placements on the Moscow Exchange,” investment company Finam analyst Leonid Delitsyn told PRIME.

“The company’s capitalization amounted to 17 billion rubles a year prior to the IPO. Now it is valued at 106 billion rubles.”

On October 13, Astra’s current shareholders offered 10.5 million shares at 333 rubles to raise 3.5 billion rubles, including 350 million rubles for possible stabilization during secondary trading for up to 30 days after the IPO.

“Investors received the stock with the enthusiasm unseen in recent year, since there was no other issuer coming to the bourse that would have won so much from import replacement in this period,” Delitsyn said.

Astra’s ecosystem is based on Astra Linux, a secured and scalable certified Russian operating system optimised for high loading that holds over 76% of the Russian operating systems market. The vendor’s portfolio also contains the means of virtualization, domain management, reserve copying, and infrastructure platforms, according to the group’s website.

“The upper end of the placement corridor stood at 333 rubles, while the peak price of the shares was twice as much. Now, when the rush has calmed down, the price fluctuates at 509 rubles and capitalization stands at 106 billion rubles,” the Finam analyst said.

The company’s ordinary shares, trading under the ASTR ticker, added 3.1% since their closure at 466.20 rubles on October 13 to 480.75 rubles on October 20. The stock corrected over the week after closing at 560 rubles on October 16.

Alexei Antonov, head of investment consulting at Alor Broker, said Astra traded in heavy volumes on Monday, the second day of quoting.

“The company is highly promising. But a 68% increase over the two days is too much. Some sobering can start anytime and the stock may fall heavily,” he said in a note.

Finam analyst Ksenia Lapshina also pointed to the start of a downward movement after growth of more than 60% during the first two days of trading.

“The public status made the company recognizable among investors and, on the whole, in addition to the key goal of raising financing, the IPO has an exclusively positive effect for Astra,” Cifra Broker analyst Daniil Bolotskikh told PRIME.

He added that the country’s IT sector is presented by only a handful of companies, and arrival of a new issuer attracts investors’ attention.

“In our view, the interest to the company’s IPO was boosted by the fact that in a climate of a high key rate, dividends shares become less appealing. In such environment, growth shares attract more attention from the investors. As to competition, the retreat of the Western rivals enhanced financial results of the whole IT sector, which can be seen in the financial statements of (Internet companies) VK and Yandex and (IT company) Positive Group – revenue soars by double-digit rates everywhere,” Bolotskikh said.

Delitsyn at Finam said that Astra’s shares would be interesting for the investors who bought stocks of Positive Group, Yandex, VK, marketplace Ozon, and real estate classifieds CIAN, among others.

The analyst added that in a couple of years Astra’s shares may join the Moscow Exchange’s IT index, which is now made up of the securities of Ozon, Yandex, VK, Positive Group, recruiting platform HeadHunter, and CIAN.

“We think Astra’s shares are promising securities for the investors on the whole. The Russian market of infrastructure software was valued at 77 billion rubles in 2022 with the share of the local developers of 36%. The market is expected to reach 270 billion rubles by 2030 with the share of the Russian developers soaring to 90%,” Bolotskikh at Cifra Broker said.

“The results stipulate a 31.1% CAGR of revenue of the local developers. Besides, the government now actively turns to the national software producers, this is why we may expect Astra’s financial results to advance.”

(95.9053 rubles – U.S. $1)

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