The shares of Romanian state-controlled hydropower producer Hidroelectrica (BSE: H2O) will start trading on the Bucharest Stock Exchange on July 12 after the biggest IPO in the country’s history.

Hidroelectrica, which is valued at EUR 9.4 bln, will become the most valuable Romanian company listed on the Bucharest Stock Exchange and increase the domestic market capitalization by about a third to EUR 38 bln.

Moreover, the liquidity of Hidroelectrica shares is expected to help the Bucharest Stock Exchange meet the criteria to be promoted to emerging market status by MSCI.

To celebrate the Hidroelectrica listing, the Bucharest Stock Exchange will organize an Opening Bell ceremony at the National Bank of Romania (NBR) on Wednesday, July 12. Top Romanian officials, including the NBR Governor Mugur Isarescu, prime minister Marcel Ciolacu, energy minister Sebastian Burduja, US Ambassador Kathleen Kavalec, UK Ambassador Andrew Noble and representatives of Franklin Templeton, Citi, Erste, Mogran Stanley and Jefferies are expected to join the Bucharest Stock Exchange, Hidroelectrica and Fondul Proprietatea managers at the event.

The event will be broadcast LIVE on BVB's Facebook, YouTube and LinkedIn starting 9:50.

Big transactions expected on the first day

The Bucharest Stock Exchange has announced that it will extend the pre-opening phase for Hidroelectrica’s shares from 15 minutes to one hour and the local brokers will start introducing orders in the system at 9:00 AM as they expect a large number of orders on the first day of trading.

The first transactions with H2O shares will be recorded at 10:00 AM and everyone is waiting to see the price evolution on the first day. The reference price is the closing price in the IPO – RON 104 per share – but many retail investors benefitted from a 3% discount and got the shares at RON 100.88.

The strong demand for shares and oversubscription on both the institutional and retail tranches of the IPO are expected to favor a positive price evolution on the first day as some investors will likely try to increase their holdings.

In the IPO, Fondul Proprietatea (FP) sold 78 million Hidroelectrica shares (17.3% of the company) for RON 8.1 bln (EUR 1.64 bln). The fund may sell its remaining 11.7 million shares in the following month as part of an over-allotment option.

editor@romania-insider.com

(Photo source: Inquam Photos / George Calin)