Europe’s largest IPO of 2023 was confirmed this week when Romanian electricity producer Hidroelectrica began trading in Bucharest.
The firm’s capitalisation has been pegged at more than €10bn, with its stock rising nearly 11% on the first day of trading.
According to Balkan Green Energy News: “After several failed attempts over the past decade, Romania’s state-owned Hidroelectrica started trading today under the ticker H2O on the premium market segment of the Bucharest Stock Exchange. In the initial public offering, settled at the beginning of the week, minority shareholder Fondul Proprietatea sold most of its 19.94% stake.”
It added: “The shares were priced at RON 104 (€21) apiece, just above the middle of the indicated range of RON 94 to RON 112 per share, translating to €9.4bn in market capitalisation. Hidroelectrica was on a firm and steady rise in early trading. It jumped as much as 10.8% to RON 114.4 per share, boosting its valuation to €10.4bn.”
Under the terms of the IPO, the Romanian government, which owns four-fifths of the company, is not allowed to sell any of its shares for at least a year. Reportedly, the IPO was part of an agreement with the European Commission. Eighty per cent of the package was reported to have gone to institutional investors.
IPO approval
The approval for the IPO was given by shareholders in March this year. According to the company, it is the largest producer of green energy in Romania and the main provider of ancillary services required in the National Energy System, being a vital company for a strategic sector, with implications for national security. The company operates 209 power plants, with a total installed capacity of 6,482 MW. It also operates the Crucea wind farm, with an installed capacity of 108 MW.
Following the IPO, FTSE Russell said it would include Hidroelectrica in its FTSE Global All-World, FTSE Global Large Cap, and FTSE Emerging indices.
