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IPOs and “follow-ons”, Brazil is back to the game!


The second week of last February was the busiest week for IPO.s (Initial Public Offerings) in Brazil since April 2013.

The results were mixed for the issuers, but the important is that things are maybe changing for better. The three-year drought of IPOs in Brazil seems to be finally starting to dissipate. At MM&FBovespa some expect that around 17 deals will be filed by the end of the year,  bot IPOs and “follow-ons”.

In February there was wariness among foreign investors related to the country’s political turmoil: Rent-a-Car Movida e Institute Hermes Pardini (a medical laboratory) concluded their IPOs despite pressures for lower prices, and $1,32 billion were got by CCR (largest Brazil’s toll road operator) follow-on offering. Unidas Rent-a-Car preferred to wait a little bit more.

In the queue of offers for 2017 are big companies such as Azul, who already applied for registration with Brazil’s CVM ( the equivalent to the Securities and Exchange Commission), Carrefour, IRB Brasil, IRB Brasil RE and XP Investimentos, a 15-year old financial services firm backed by US private equity firm General Atlantic. Other “probables” in the list are Grupo NotreDame Intermédica, owned by Bain Capital, and Netshoes.

According to Vinod Sreeharsha, who just wrote an article in the New York Timeson the subject,  investment bankers say they are seeing better opportunities and greater appetite from foreign investors. The executives are still cautious, but they say they are more hopeful compared with past years. “On the macro front, the country is on the right path with the right team handling the economy,” said Fabio Nazari, a partner and head of equity capital markets at BTG Pactual.