Iran's stock market regulator allowed three companies to go public in the past week and more are poised to hold initial public offers in the weeks as the market started showing signs of recovery.
IPOs were on hold since mid-September when the share market was fading with one of its biggest downturns in recent memory.
Fears that the IPOs may not be well-received as before was the main reason behind the postponements. The regulator apparently took some lesson from the last listing, where Sepehr Saderat Financial Group Company, an investment entity affiliated to the semi-private Bank Saderat Iran, failed to break the previous IPO turnout record and didn’t perform well.
After making a whopping 300% gains in the first four months of current fiscal year, the main index of Tehran Stock Exchange, TEDPIX, went into a deep correction phase that lasted until early November. It shed 900,000 points and lost 42% during the bear market before paring 25% of the loss in the past seven weeks.
With renewed retail investor interest in the bourse amid lethargic parallel markets, two companies went public on Wednesday.
Bouali Sina Petrochemical Company held one of the biggest IPOs in recent months on Wednesday selling 420 million shares representing 12% of its total stake.
The company was listed at the TSE to become the 365th listed company and generated 17.4 trillion rials ($70m). Each buyer was allowed to buy a maximum 200 shares at 41,430 rials each, according to the TSE website.
A subsidiary of the giant Persian Gulf Petrochemical Industries Company, BSPC is located in the Special Economic Zone of Bandar Imam Khomeini.
The company on its website says it is the largest manufacturer of aromatic products in the Bandar Imam Khomeini Special Zone. Its geography gives it easy access to international waters and appropriate export facilities.
Kowsar Bahman Investment Company was the second company that went public. Its IPO lasted two days starting from Tuesday. As a subsidiary of Sina Financial and Investment Holding, the newly listed investment firm offered 12% of its stake comprising 300 million shares.
The company earned 3.62 trillion rials and was listed at the junior equity market Iran Fara bourse. Both companies began secondary trade since Saturday.
The IFB also hosted another IPO for a wood industry company last Wednesday. Khazar Choob Company offered 35 million shares, accounting for 17.5% of the total.
Price discovery in all three IPOs was through book-building -- a process by which an underwriter attempts to determine the price at which an IPO is to be offered. Price discovery involves recording investor demand for shares before arriving at the issue price.
