ES in Megafon, the Russian mobile telecoms group controlled by Arsenal stakeholder Alisher Usmanov, rose above the $20 issue price yesterday on news that the stock would be fast tracked into the main Russian stock market index, the MSCI.
Normally the MSCI requires three months of trading history for a company that has just floated, but there is a fast track approach to large IPOs that is based on valuation. Yesterday the MSCI confirmed that Megafon would qualify for early inclusion, which means it will likely receive passive investment from many Russian funds.
The MSCI currently has 26 constituent companies of which three are in the telecoms sector.
The London and Moscow flotation of Megafon was one of the largest IPOs of the year. Its progress through to its first day of trading on Wednesday has been dogged by questions over the group’s corporate governance following a decision by Goldman Sachs before the October roadshow to pull out of the banking syndicate advising on the deal.