Russian discount retailer Fix Price is planning a London stock market listing that could value the company at more than $6bn.
The initial public offering, which would aim to raise at least $1bn, would be the largest by a Russian company in London since 2017. Fix Price filed the paperwork with the stock exchange on Monday and is aiming to list in March.
The chain, whose business model is akin to that of the UK’s B&M and Dollar General in the US, has prospered in recent years because of a slump in living standards that has pushed Russians towards discount retailers.
It has a range of about 1,800 products, including household goods, cosmetics and food, which it sells at fixed prices all under Rbs250 ($3.40), with about 80 per cent under Rbs100 ($1.03).
The company operates more than 4,200 stores across Russia and the former USSR. Last year, revenues increased by 33 per cent to Rbs190.1bn ($2.6bn), with net profit of Rbs17.6bn. Like-for-like sales have risen at double-digit rates every quarter for 16 consecutive quarters.
Companies like Fix Price have benefited from changing shopping habits in Russia as real incomes have fallen by 11 per cent since 2013, including a 3.4 per cent slump last year.
X5 and Magnit, Russia’s two largest food retailers, recently launched their own discount chains.
Fix Price investors including founders Sergei Lomakin and Artem Khachatryan, as well as minority investors Goldman Sachs and Marathon Group, will sell shares in the IPO.
Lomakin and Khachatryan, who set up Fix Price in 2007, plan to retain control of the company, according to people familiar with the matter.
The shares will be tradeable as global depositary receipts, with a secondary listing on the Moscow exchange.
BofA Securities, JPMorgan, Citigroup, Morgan Stanley, and VTB Capital will act as joint co-ordinators and joint bookrunners on the deal.
Several Russian companies are eyeing foreign listings after a run of successful recent IPOs. Ozon, one of Russia’s largest online retailers, went public in New York last year at a valuation of $6.2bn, since when its market capitalisation has risen to more than $13bn.
Forestry group Segezha, online streaming entertainment platform ivi, and gold miner GV Gold are all considering IPOs, according to people familiar with their plans.
This article has been updated to clarify that VTB Capital are not selling shares in the IPO.