Russia's Mercury Retail Group has said that the indicative price range for its initial public offering (IPO) has been set at $6 to $6.50 per global depositary receipt (GDR), implying a market capitalisation of $12 billion to $13 billion.
The group, which runs two chains of nationwide alcohol and convenience stores, plans to raise $1.2-$1.3 billion in the offering of up to 200 million GDRs on the Moscow Exchange, with book-building beginning on Wednesday and due to end on or around November 9.
IPO Activity In Russia
Mercury Retail's offering comes amid a flurry of Russian IPO activity that has picked up pace as the economy improves after an initial hit from the COVID-19 pandemic last year and as concerns over more Western sanctions fade. IT firm Softline raised $400 million last week.
A mix of low incomes and rising inflation is stifling purchasing power in Russia and driving growth of discounters and convenience stores, a trend that has benefited Mercury Retail and its more than 14,000 stores across the country.
The group on Wednesday published highlights from its third-quarter results, reporting a like-for-like sales increase of approximately 14% year-on-year.
That metric grew by an average of 15.9% for the eight previous quarters, the company said.
International And Russian Investors
Mercury Retail Chairman Igor Kesaev said the company was presenting its business model to international and Russian investors, expecting them to appreciate the enormous market opportunity and an attractive dividend policy.
"Under its current dividend policy, the group aims to pay dividends quarterly with a target pay-out ratio of at least 50% of net income for the period under IFRS," Mercury Retail said in a statement.
BofA Securities, JP Morgan, SberCIB and VTB Capital are acting as joint global coordinators and joint bookrunners.
Gazprombank and Renaissance Capital are acting as joint bookrunners.
Mercury Retail expects to begin trading on the Moscow Exchange under the ticker symbol "MRHL" on or around Nov. 10.