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December 2023 (published: 07.12.2023)
Number 4(55)
Home > Issue > Assessment of the dynamics of changes in the capitalization of russian companies after the IPO
Onore A.S.
, Fedko T.S. , Sosnilo A.I.
In this article the authors analyze the current state of IPO on Russian stock exchanges. Various views of researchers on the topic under study are highlighted. The paper uses general scientific research methods (analysis, synthesis, generalization and comparison). The relevance of the chosen topic of the study is due to the need to be able to effectively assess the investment attractiveness of the enterprise and its ability to effectively conduct business after the IPO. The purpose of this study is to assess the efficiency of doing business by a public company in 10-15 years after the initial public offering on the example of PJSC "Magnit" and GC "Rusagro" by calculating the weighted average cost of capital (WACC) and return on investment capital (ROIC). To analyze the capitalization of public companies, the existing methods of its assessment (market capitalization method and analysis of the value of the multiplier of the market value of the company to net profit), their advantages and disadvantages were considered, and a method of assessing the investment attractiveness of the company and business success with the help of WACC and ROIC indicators was proposed.The article presents step-by-step calculations of both indicators for two Russian companies, in the case of WACC two methods were used due to negative values for 2022 due to the unstable geopolitical situation that affected the value of shares that are included in the calculation of the indicator. The obtained values of return on invested capital are compared with the weighted average cost of capital in order to evaluate the success of the company's management in running the business. In conclusion, the values for each company (PJSC “Magnit” and GC “Rusagro”) are analyzed respectively and a conclusion is made about more efficient business conduct of one of them. Prospects for research in this direction can be traced in the analysis of the impact of the geopolitical situation on the capitalization and WACC, ROIC indicators of companies.
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Keywords: IPO, stock exchanges, financial market, capitalization of the company, initial public offering of the company, capital, financial market, P/E, investment attractiveness, WACC, ROIC, CAPM
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
UDC 336.648
Assessment of the dynamics of changes in the capitalization of russian companies after the IPO
In this article the authors analyze the current state of IPO on Russian stock exchanges. Various views of researchers on the topic under study are highlighted. The paper uses general scientific research methods (analysis, synthesis, generalization and comparison). The relevance of the chosen topic of the study is due to the need to be able to effectively assess the investment attractiveness of the enterprise and its ability to effectively conduct business after the IPO. The purpose of this study is to assess the efficiency of doing business by a public company in 10-15 years after the initial public offering on the example of PJSC "Magnit" and GC "Rusagro" by calculating the weighted average cost of capital (WACC) and return on investment capital (ROIC). To analyze the capitalization of public companies, the existing methods of its assessment (market capitalization method and analysis of the value of the multiplier of the market value of the company to net profit), their advantages and disadvantages were considered, and a method of assessing the investment attractiveness of the company and business success with the help of WACC and ROIC indicators was proposed.The article presents step-by-step calculations of both indicators for two Russian companies, in the case of WACC two methods were used due to negative values for 2022 due to the unstable geopolitical situation that affected the value of shares that are included in the calculation of the indicator. The obtained values of return on invested capital are compared with the weighted average cost of capital in order to evaluate the success of the company's management in running the business. In conclusion, the values for each company (PJSC “Magnit” and GC “Rusagro”) are analyzed respectively and a conclusion is made about more efficient business conduct of one of them. Prospects for research in this direction can be traced in the analysis of the impact of the geopolitical situation on the capitalization and WACC, ROIC indicators of companies.
Read the full article
Keywords: IPO, stock exchanges, financial market, capitalization of the company, initial public offering of the company, capital, financial market, P/E, investment attractiveness, WACC, ROIC, CAPM
DOI 10.17586/2310-1172-2023-16-4-128-140