IPO of the Year in Russia and the World: A Comparison of Multiples and Demand
Two Parallel Worlds: Global Boom vs. Russian Stagnation
The primary market for initial public offerings (IPOs) in 2025 vividly illustrated the phenomenon of diverging trajectories: while global markets are experiencing a true renaissance for IPOs with record valuations and unprecedented demand, the Russian market is facing systemic stagnation. In the first half of 2025, the global IPO market raised $61.4 billion through 539 deals, demonstrating a 17% increase compared to the same period of the previous year. However, in Russia, there was essentially only one full IPO for the entire year of 2025 — the crowdfunding platform JetLend, which went public on the SPB Exchange in March.
This dramatic difference in market activity is reflected in key metrics for company valuations and investment demand. Valuation multiples for Russian companies are trading at a significant discount compared to foreign counterparts, and the oversubscription for offerings shows fundamentally different levels of investment enthusiasm. Understanding the reasons behind this divergence is critically important for both issuers planning to go public and investors assessing the potential returns from participating in IPOs.
Valuation Multiples: Anatomy of the Global Divide
Technology Sector: Premium for Growth
Technology companies in global markets demonstrate median EV/EBITDA multiples in the range of 9-12.5x across various segments. Fintech companies are valued at 9.8-12.3x EBITDA, while SaaS companies see valuations from 8.7-12.4x depending on the size of the business. Additionally, the fastest-growing segments receive an added premium: cybersecurity firms and semiconductor startups trade at 12.5-12.8x EBITDA, reflecting the strategic importance of these areas for the global economy.
The situation is even more striking based on the EV/Revenue multiple. Median figures for technology IPOs range from 2.2-3.4x across different segments, with rapidly growing SaaS firms reaching valuations of 6.1x for public companies and around 4.7x for private deals. The hottest segments related to artificial intelligence and machine learning receive valuations exceeding 10-15x annual revenue when demonstrating triple growth rates and strong competitive positions.
The Russian market presents a radically different picture. The median EV/EBITDA multiple for M&A deals in Russia in 2024 was just 4.8x, which is 2-2.5 times lower than foreign counterparts. Moreover, even this figure is below the pre-crisis level of 2021 when the median was 5.5x. According to Advance Capital, the average multiple for Russian deals in 2021 exceeded 6x EV/EBITDA, but it has not managed to return to those levels by 2025.
IT companies, which traditionally command a valuation premium in the Russian market, were placed with multiples of 9-11x EV/EBITDA in 2024 — significantly lower than global counterparts at 11-12.5x. The gap is even more dramatic for traditional sectors: while global IPOs of industrial companies are valued at 8-10x EBITDA, their Russian equivalents barely reach 4-5x. This difference cannot be solely explained by variations in asset quality or growth prospects — it reflects systemic factors affecting pricing in the Russian jurisdiction.
Cost of Capital as a Fundamental Constraint
The key rate of the Central Bank of Russia at 21% creates a fundamental constraint on the growth of valuation multiples of Russian assets. With such borrowing costs, the hurdle rate of return for investors significantly increases, leading to more aggressive discounting of future cash flows. In the classic DCF model, the discount rate includes the risk-free rate plus the risk premium. When the risk-free rate (in Russia’s case, the yield on government bonds) is at 16-17%, even conservative investors demand an annual return of 20-25% to invest in stocks.
In developed markets, central bank rates range from 4-5.5%, allowing companies to attract capital at much lower costs. This 15-17 percentage points difference in the cost of capital directly translates into a discrepancy in valuation multiples. Simple calculations reveal that, with a discount rate of 10% (typical for developed markets) and a cash flow growth of 5% annually, the EBITDA multiple would be around 12-14x. With a discount rate of 25% (the Russian reality) and the same growth rates, the multiple plummets to 4-5x.
Analysts expect the growth of valuations in Russia to slow down in 2025 precisely due to the sustained high key rate. Companies planning IPOs "do not believe that the current valuations of their companies, the multiples correspond to their expectations," leading to the postponement of offerings until macroeconomic conditions improve. This creates a vicious cycle: the shortage of IPO supply reduces market liquidity, which, in turn, increases the liquidity premium and further pressures multiples.
Country Risk: The Invisible Hand of the Market
The country risk premium for Russia, according to the methodology of Professor Aswath Damodaran from NYU Stern, constitutes a significant amount, substantially exceeding that of developed markets. This premium encompasses geopolitical factors, sanctions pressure, regulatory change risks, limited access to international capital markets, and macroeconomic volatility. Even high-quality Russian companies with strong fundamental indicators bear the burden of this country discount.
As analysts at the Moscow Exchange point out, "the multiple is the flip side of risks in the system. Even in India, with its higher multiples, the cost of risk is lower than in Russia." This means that Russian companies are forced to list at lower valuations not due to inferior business quality, but because of heightened risk perception by investors. Indian tech companies receive valuations of 15-20x EBITDA for similar growth rates as their Russian counterparts, which are valued at 9-11x. The 40-50% difference is due specifically to country risk.
Sanctions pressure creates additional constraints. Russian companies have limited access to Western institutional investors, who traditionally serve as anchor participants in major IPOs. The pool of potential buyers narrows down to Russian institutions and retail investors, which reduces competition for assets and depresses offering prices. The absence of large international funds in the capital also negatively impacts the liquidity of shares post-listing.
Demand Analysis: Oversubscription as a Mirror of Investment Sentiments
Global Markets: The Battle for Allocation in Hot Deals
The global IPO market in 2025 demonstrates exceptionally high demand from investors, particularly in technology segments. The phenomenon of multiple oversubscriptions has become the norm for quality offerings. CoreWeave, a company specializing in cloud AI computing, attracted $2.8 billion amid enormous investment interest. Institutional investors submitted bids amounting to several times the offering size, allowing the underwriters to set the price at the upper end of the range while still ensuring a strong aftermarket growth.
Figma, which conducted its IPO in July 2025, faced massive demand from institutional investors. The $4.2 billion offering was oversubscribed multiple times, with bids coming not only from traditional tech funds but also from crossover hedge funds. After trading began, the stock skyrocketed by 250%, reaching $142 per share by early August, representing a phenomenal initial return for allocated investors given the offering price of around $33.
The Indian market displays record levels of oversubscription, especially among retail investors. Individual IPOs show oversubscription rates of tens or even hundreds of times, while the Grey Market Premium — the unofficial premium at which shares trade prior to official listing — reaches 50-100% for hot IPOs.
Russian Market: Chronic Undersubscription or Realistic Expectations?
JetLend, the only full-fledged Russian IPO of 2025, showed modest demand metrics compared to global counterparts. The company raised approximately 476 million rubles on the SPB Exchange, with the oversubscription level exceeding the offering size, but not reaching the multiples seen in international IPOs. Institutional demand was moderate, and retail investors manifested restrained interest, which reflected in the subsequent price dynamics.
At the bond placement stage, JetLend previously witnessed more than double oversubscription, which is considered a good result for the Russian market, but is modest in the context of global IPOs with multiples of oversubscription in tens of times. The difference in oversubscription levels reflects not only the quality of issuers but also market risks in Russia and alternative investment opportunities in the form of government bonds and deposits.
The planned IPO of "Dom.RF" shows more optimistic signals. The Ministry of Finance of Russia reports "good demand" in preparation for the offering, with the possibility of increasing the volume or price not excluded. Approximately 5% of shares are planned to be offered, with a potential attraction of up to 15 billion rubles, although options for raising 40 billion rubles have also been discussed. The state status of the issuer and conservative valuation may attract institutional investors.
Demand Structure: Institutions vs. Retail
In developed markets, the typical allocation distribution in IPOs ranges from 70-80% for institutions and 20-30% for retail investors. In Russia, however, retail traditionally held a larger share, but following a series of unsuccessful IPOs, enthusiasm has waned. Current offerings are facing a shortage of institutional demand, while retail investors prefer fixed-income instruments.
Company Valuation Methodology During IPOs
Comparative Analysis: Seeking Analogues
The comparable companies method serves as the primary valuation tool. A peer group is selected based on size, growth rates, and industry specificity. Median multiples of the peer group are applied to the financial metrics of the IPO candidate with adjustments.
In Russia, the lack of publicly traded companies for comparison forces the use of international analogues with adjustments and data from private deals, which increases uncertainty and leans towards conservative multiples.
DCF and the Influence of Macroparameters
The discounted cash flow (DCF) model serves as a validation for the valuation. The primary parameters — forecasts, discount rate, and growth rate — are directly influenced by macro factors. With the Central Bank of Russia rates above 20%, multiples come out to be 2-3 times lower than in developed markets.
Bookbuilding: Price Formation Through Interaction with Investors
Bookbuilding allows for determining the optimal offering price through bid collection. In global markets with deep demand, the book is oversubscribed multiple times, allowing for price increases. In Russia, the narrow investor base limits the efficiency of the process, reducing the final offering price.
IPO Cases of 2025
JetLend: Lessons of the Pioneer
JetLend became the first Russian crowdfunding platform to go public in 2025. The offering took place on the SPB Exchange, raising around 476 million rubles. The choice of a non-quoted part of the list reduced requirements but limited liquidity. The after-market price fell by 24%, reflecting market stagnation and high rates.
Figma: Global Success
Figma successfully conducted its IPO on NASDAQ with a valuation of approximately $20 billion, raising $4.2 billion. Its shares surged 250% within a few months, demonstrating premium multiples of 35-40x Revenue — levels unattainable for Russian companies.
CoreWeave: Investments in AI Amid Losses
CoreWeave attracted $2.8 billion despite operating at a loss, leveraging the growth potential of AI infrastructure. The shares increased nearly threefold since the offering, confirming the high-risk appetites of global investors. Such an IPO is unattainable for Russian companies facing losses.
Strategies for Investors
Arbitrage and Long-Term Investments
The gap in multiples creates opportunities, yet country and liquidity premiums restrict arbitrage. Russian investors should focus on the quality of businesses and mid-term prospects, accepting higher risks.
IPO Selection
It is crucial to assess competitive advantages, management quality, transparency, and the adequacy of the valuation. The PEG ratio and other metrics help identify undervalued offerings.
Participation Tactics
For retail investors, participating in IPOs is about balancing short-term quick returns with long-term sustainability. In Russia, it is often justified to wait several months post-offering to assess actual dynamics.
Development Forecast
Russia
The prospects for 2026 depend on reducing the key rate. Optimistically, it may fall to 15-17%, with an increase in IPO volumes and multiples. Pessimistically, the sustained high level of rates will maintain stagnation and a scarcity of offerings.
Global
Global IPOs will continue to grow due to tech giants and AI companies. The market may reach record volumes, but the risks of correction remain.
Convergence of Multiples
A rapid alignment of valuations is unlikely due to structural regional differences. The gap persists, and it is critical for investors to consider relative advantages rather than absolute multiples.
