High key rate makes investments in the stock market less attractive

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Leading analyst of Freedom Finance Global Natalia Milchakova noted that in the conditions of a high key rate, the company's value assessment is not always overstated or understated by the issuer: "Independent appraisers who make this assessment take into account that the key rate is not raised just like that. This means that the country has high inflation, a weak ruble, and high other economic and not only economic risks. Therefore, the company's assessment often turns out to be either unsatisfactory to the issuer, or, conversely, unsatisfactory to investors who believe that the issuer, which is going to place with high coefficients, for example, the ratio of capitalization to revenue or to net profit, does not sufficiently take into account future risks for the business and, accordingly, risks for investors."


Leonid Pavlikov, Managing australia telegram Director for Equity Capital Markets at the Finam financial group, noted that the other side of the high key rate is the investor's reorientation towards more conservative instruments: the conditions for placing funds in banks are becoming attractive, deposit rates are reaching 23-25% per annum, so direct investments in the stock market may not seem so attractive to retail investors.

Natalia Milchakova added that new names that are little known to investors most often go public; in addition, in Russia, most of the companies that go public are small- or mid-cap companies. "The IT sector is perceived by many conservative investors as a high-risk investment, especially since some IT companies not only have losses in net profit, but sometimes even negative EBITDA," Natalia Milchakova emphasized.

Leonid Pavlikov explained that issuers of shares have one option to offer the desired yield - to significantly reduce the company's valuation: "It should be taken into account that at IPO companies, as a rule, already include a discount in the valuation, which not every owner is ready to increase."

IT IPO Forecasts

Yulia Khandoshko noted the successful placement of companies such as IVA, Geosoft and Arenadata among the past IPOs: analysts from the largest Russian banks highlight Arenadata as one of the most promising companies for investment. "At the same time, the valuation of companies such as Skillbox and Skyeng will not necessarily be lower than expected. There is always demand for investments in good IT companies with a high reputation. It is quite possible that they will be able to place successfully, especially considering the successful examples of IPOs in 2024," she added.

According to Yulia Khandoshko, the first two quarters of 2025 look like the optimal time to go public: the demand for IT companies such as Arenadata and Yandex is obvious, and there are simply no alternatives to attracting investment in Russia.