The Moscow Exchange will, for the first time in its history, become a platform for the listing of a special purpose acquisition company (SPAC). This refers to a structure created to merge with a private business and subsequently bring it to the stock exchange, bypassing the classic IPO procedure. According to my information, the listing is planned to be launched as early as this year, although at the initial stage the issuer will not receive a full listing on the platform itself.
The pioneer will be a private company from the IT sector. The organization's name and deal parameters are still being kept under wraps, but the fact that preparations for the listing are underway is confirmed at the highest level of market infrastructure. Vladimir Ovcharov, Managing Director of the Equity Market at the Moscow Exchange, said during a briefing for MediaLogia journalists that the parties are already working on structuring the deal, and the exchange infrastructure is fully ready to launch the process.
What the SPAC scheme entails
A SPAC is an organization created solely to merge with a private company seeking to go public without the lengthy and complex procedure of a traditional IPO. The funds raised from investors during the initial offering are invested in the target company, which then conducts a public listing. The SPAC's shares are then converted into the target organization's securities.
It is important to understand the logic of this format: many issuers at an early stage of development are not ready to accept a large number of retail investors as shareholders, yet they are in dire need of raising capital. The SPAC structure solves this problem by allowing a company to develop promising projects and only then go public via an IPO.
Global context and the return of interest
Such mechanisms have long been successfully used in global markets — in the US and Europe. Their peak popularity came in 2020–2021, when in March 2021 the volume of funds raised through SPACs exceeded $36 billion. However, a decline followed: in the first half of 2022, such structures raised only $9 billion compared to $317 billion for the whole of 2021, and July 2022 became the first month in five years when SPACs in the US failed to raise a single dollar.
Interest in the format is now returning. For example, the humanoid robot manufacturer Agility plans to go public through a merger with a SPAC at a valuation of $2.5 billion. In Russia, the idea was discussed back in 2021, and the current preparation of the deal is a return to a long-standing discussion that is finally taking on real shape.
For the Moscow Exchange, this is a logical step in expanding its product line. Demand from retail investors remains high: in July, they invested 142.9 billion rubles in securities, and their share of equity trades reached 63.3%. The SPAC debut will give this audience another way to participate in financing private companies at an early stage.
My view: the emergence of SPACs on the Russian market is a timely and mature step that diversifies tools for issuers and investors. However, the key factor for success will be the transparency of deal structuring and the protection of minority shareholders' rights; otherwise, the format risks repeating the global mistakes of 2021, when many SPAC deals disappointed investors.