One of the candidates who canceled their offer, alleging unfavorable market conditions, was Agrogalaxy, a retail company for agricultural inputs, which even launched a initial public offering (IPO) which could handle R $ 1.4 billion. It was forced to suspend the operation because it did not find demand among investors, making clear a much more selective market.
The total number of companies in the queue to make an offer in the coming months, with a request for registration with the Securities and Exchange Commission (CVM), is still large, with more than 40 companies, including Grupo Avenida, the Getninjas app and Caixa Seguridade, insurance subsidiary of Federal Savings Bank that plans to face greater market volatility and aversion to state-owned companies.
A source at an investment bank stresses that the market is not closed to offers, but investors are more selective and asking for more discounts in relation to company prices. “The most price-sensitive companies are postponing the offer,” says the source, who spoke on condition of anonymity. “The window is open, but the demand is thinner,” says another source.
Reduction of expectations
The greatest risk aversion occurs after a first window of the year for high-volume issues, with a volume of more than R $ 30 billion in the Brazilian stock exchange, considering not only the IPOs, but also the subsequent offers (follow-ons) of companies already listed. After this boom, the initial forecast was that the offers planned for the coming months could turn over R $ 50 billion, which should no longer materialize.
A third source, also from an investment bank, says that today 80% of the offers that are in the queue should wait for another moment due to the risk aversion that grew over the past month. With that, only a few will succeed in the current situation, which is quite different from what was observed in January and February. The source adds that foreign investors, who since the end of last year were directing a greater flow to Brazil, are much more selective at the moment.
The first important offer in the current window will be that of Diagnósticos da América (Dasa), owner of the diagnostic network Delboni Auriemo, which is pricing a subsequent offer of around R $ 6 billion next week. It will set the tone for the market’s appetite. A source said, however, that this offer already faces an environment of greater challenge. For now, Mater Dei is the “darling” among the sector’s businesses that are in the IPO queue.
The health sector, due to the demand from investors, ended up attracting many companies in search of funding via the stock exchange. In addition to Dasa and Mater Dai are on the street with offers The Hospital Care Caledônia, the pharmaceutical company Blau, and Viveo, from CM Hospitalar, for the distribution of hospital supplies and medicines.
Rolim’s partner, Viotti, Goulart, Cardoso Advogados, Fabio Appendino, says that volatility makes stock price definition difficult. “This may affect the future profitability of the businesses and their consequent cash generation, the basis for determining the valuation of the companies and, consequently, the price of the shares launched at the IPO”, he comments.
PGLaw partner and professor at USP, Carlos Portugal Gouvêa, recalls that volatility creates an environment of more challenges for stock offers even in more mature capital markets. On the other hand, he stresses that the scenario of very low interest rates in Brazil ends up benefiting the variable income sector, including the stock exchange. “Some of these companies have very good numbers and now they have evidence that they can pass stress tests well, like the crisis itself”, he comments.
Sought, Açu Petróleo said that it maintains its intention to make the IPO in due time, which should occur in the next 12 months. “All of the company’s investment plans are maintained and reinforced for 2021”, he stressed. Paschoalotto stated that the request for withdrawal occurred due to the “moment of market volatility and health crisis still in progress”. GranBio said it has postponed its IPO strategy for the second half of 2021.
MRV, Urba’s parent company, said that it believes in the great potential of the company and that “it will wait for the opportune moment to return to the capital market”. Tok & Stok, in turn, said that due to the lack of ideal market conditions, it decided to suspend the IPO and proceed, at this moment, through available resources. According to the company’s president, Octávio Pereira Lopes, the goal is to be a publicly traded company in the medium term.
The other companies that gave up on the IPO this year did not comment.
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