Biotech firm raises $2.2 million in first Russian IPO this year

• Genetico is valued at $18m on small public listing
• Only the second Russian IPO since the start of the Ukraine conflict
• Russian markets cut off from western capital by sanctions
• This content was produced in Russia, where the law restricts coverage of Russian military operations in Ukraine.

MOSCOW, April 25 (Reuters) – Russian biotech startup Genetico (GECO.MM) raised 178.8 million rubles ($2.2 million) in an IPO on the Moscow Stock Exchange on Tuesday – only the second Russian IPO , since Moscow sent tens of thousands of troops to Ukraine last year.

An unprecedented package of Western sanctions and Russian countermeasures has effectively cut off Russian financial markets from Western capital over the past 14 months, forcing many Russian companies planning to go public to reconsider.

Electric scooter company Whoosh (WUSH.MM) was the only Russian company to conduct an initial public offering (IPO) in 2022, in a debut that raised less than half of its original target and relied heavily on Russian retail investors for capital.

Before Moscow launched its military campaign, analysts had said Russia’s IPO pipeline looked healthy, with a handful of well-known companies preparing to go public with big deals.

Genetico, a subsidiary of the Human Stem Cells Institute (ISKJ.MM), sold 10 million shares – representing 12% of the company’s total capital – for 17.88 rubles ($0.2192) a share in its IPO on Tuesday. the company said in a statement.

It said it will use the funds raised to develop its products in Russia, penetrate foreign markets — in the former Soviet Union and Asia — register new testing systems and develop candidate drugs to treat rare diseases.

The IPO gave the company a valuation of 1.48 billion rubles ($18 million) — a far cry from the multimillion and multibillion-dollar deals Russian companies placed in Ukraine before the conflict.

“Western sanctions limit Russian companies’ ability to attract shareholders when they conduct an IPO in Russia,” said Evgeny Kalyanov, an analyst at Moscow-based investment group BCS.

Nonetheless, he said Genetico’s listing shows that the Russian market infrastructure is working and may indicate that future IPOs of Russian companies are possible.

($1 = 81.7150 rubles)

Reporting by Olga Popova; writing by Jake Cordell; Editing by Gareth Jones

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