Banks race to bring Brazilian IPOs to market

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.

About admin

I've been researching and writing on Brazilian financial markets, industry and economy since 2006 for a wide range of specialist media, consultancies and investors. Before that I spent over 10 years in London and New York writing for and editing magazines and journals dedicated to finance, investment and economics in developing markets, mostly for the Euromoney Institutional Investor group and Thomson Financial. Areas of coverage Below are samples of areas that I cover and some of the common themes that I investigate. Capital markets BM&FBovespa markets *capital raising trends: via equities (IPOs and secondary issuance), debt and loans *the asset management industry: legislation and coverage of the key hedge, pension and investment funds * corporate governance: how the regulator is seeking to strengthen best practice and limitations * debt markets: the nascent corporate markets, attempts to boost liquidity and new insturments. * private equity market: why this market has been so successful, who’s involved. *electronic, high frequency trading and alternative trading platforms: what does the future hold? Banking *credit: the growth of consumer and business credit and competition between banks and models *Public versus private: the role and market share of public and private sector banks and the politicization of the industry * internationalization: which Brazilian banks are expanding overseas and where * investment banking: the growth of the domestic market and who’s winning which mandates *regional banks and development banks: what role they play in the industry and how they compete Mining *licensing: the complex process of obtaining environmental, water, land and operating licenses at a state and federal level. * capacity: the feasibility and sustainability of capacity increases * financing: how miners are raising finance in Brazil and abroad *competition: the interplay Vale, MMX and junior miners *logistics: rail, road and port connections Oil and gas: the fund raising issues related to the massive of pre-salt (link) Multilatinas: Who are they and how and where they are expanding Meatpacking: Are debt burdens sustainable, what are the different business models for areas such as branding and distrbution Agriculture: How are farms consolidating, what are environmental risks, how can foreign investors be involved. IT and software: Can Brazil take on India and build a viable long-term IT industry? For more information on clients and work, please see the media and consultancy sections.
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