The moribund Brazilian IPO market is kicking off again. The real is up, the Bovespa is reaching 66,000 and foreign investors, long the driver of the IPO market, have been coming off the sidelines to participate in the currency and stock market rally.
Investment banks are breathing a sigh of relief: they have had a lean time of it and have built up a pipeline of companies that they are now seeking to squeeze into the next few months. The first-mover advantage is accelerating the process to warp speed.
First in line is Seabras, the subsidiary of Norwegian company Seadrill. It is tapping into the pre-salt oil boom and a lack of secondary opportunities: investor continue to be rattled by government meddling with Petrobras most recently highlighted by the replacement of Sergio Gabrielli for Maria das Graças Foster. Isolux Infraestructure, a concessions holder and new energy participant, as well as two travel companies are in line.
Brasil Travel Turismo e Participações (a consortium of a rag-tag of travel agencies and exchange houses) and the very established CVC Brasil Operadora e Agência de Viagens will vie for investor attention, hoping to push the growing middle class button. CVC’s enviable track record and coherent business model promise to be a winning combination in this battle.
Will this surge of interest be enough to kick start the small-cap segment Bovespa Mais (BM)? Launched in 2008, BM looked spectacularly mistimed, attracting just one company to list in three years. Now two companies, drinks company Play Bev and car park operator, Ekoparking, have registered with the regulator to list shares. Ekoparking is – rather fatuously - playing on the Olympics ticket to gain interest while Play Bev is plugging the unlikely name Playboy Energy Drink.
With the developed world rally showing signs of sputtering, investment bankers will need to rally attention fast to gain traction in the chaotic world of Brazilian IPOs.