Russia’s Online Retailer Ozon Goes Public On Nasdaq, Stocks Surge More than 40% On First Day

Russia-based online retailer Ozon debuted on Wall Street to raise about $990 million in its initial public offering, the latest in the fleet of technology companies going public in 2020.

The Russian retail giant priced close to 33 million shares at $30 apiece and its shares surged over 40% on its first day, closing at $40.18. The IPO price valued the company at $6.2 billion, Bloomberg quoted a Forbes Russia report.

Ozon is going public amidst rising demand for technology stocks in the busiest fourth quarter for new listings since 1999. Technology IPOs this year have raised over $59 billion worldwide, according to Bloomberg.

The company outlined its plans to use these funds for general corporate purposes. Goldman Sachs and Morgan Stanley worked on the listing along with Citigroup, UBS Group AG and three Russian banks.

Ozon is riding on an e-commerce surge prompted by the COVID-19 pandemic across the world. The company reported a 142% increase in its gross merchandise and a 70% year-on-year increase in revenue in the first nine months of 2020.

Ozon is the largest Russian IPO since EN+ Group in 2017. Its IPO comes at a time when investors are favoring tech stocks, especially in emerging markets. Polish e-commerce group Allegro.eu raised nearly $2.4 billion in September in Warsaw's biggest IPO ever.

For most of its trajectory since its inception in 1998, Ozon has followed Amazon’s business path. It started with selling books and DVDs and expanded to other items, including electronics. It is backed by Moscow-based conglomerate Sistema and some private equity firms, including Baring Vostok Capital. These investors agreed to buy shares worth $135 million from Ozon at IPO price.

Ozon has tough competition in its home market with the largest e-tailer being Wildberries, a privately owned firm largely focussed on apparel. AliExpress Russia, a joint venture run by Alibaba Group and Mail.ru Group, is also a rival.

The company has recently branded itself similar to Alibaba, a marketplace that brings customers and merchants together on a platform, rather than maintaining its own inventory.