Tehran exchange suffers another IPO setback

05 August 2010

Dana Insurance’s July listing postponed

Iran’s Dana Insurance Company has delayed its plans to list 61 per cent of its shares on the Tehran Stock Exchange (TSE). Iran has yet to launch an initial public offering (IPO) this year - several other planned listings have also stalled.

Dana Insurance was scheduled to launch at the end of July according to Iran’s markets regulator, the Securities Exchange Organisation (SEO).  

A new date for the IPO has not been released. “Most likely it will be floated after the end of Ramadan on 11 September,” says a Tehran-based analyst. “All the paper work and regulatory side of things has been completed so it is pretty much ready to be launched.”

Most likely it will be floated after the end of Ramadan on 11 September … All the paper work has been completed

Tehran-based analyst

No reason has been given for the delay, but it serves to further underline Iran’s sluggish listing activity to date this year.    

Despite currently ranking as the world’s second-best performing equity market in the world, market appetite for listing on the exchange has been dampened by escalating political tensions over Iran’s nuclear programme.

This has resulted in several stalled listing attempts this year.  

In May, the government announced a delay in the public offerings of two Iranian automobile companies, Iran Khodro and Saipa, citing uncertainty over their international commitments. No new listing date has been announced.

In early April this year, the government-owned Iranian Privatisation Organisation published a list of 90 companies shortlisted for privatisation by 2014, with around 50 companies on the list considered high-priority, including national carrier Iran Air. The Iranian Privatisation Organisation believes that it can raise more than $12bn through these privatisations.

However, the speed of these plans has been much slower than was anticipated.

In April this year, Ali Mashayekhi, head of investment research at Tehran-based fund manager Turquoise Partners, estimated that there would be between 10-20 listings by the end of the current Iranian calendar year on 20 March 2011, but he has since revised this figure downwards.

“I think ten is now a more realistic figure,” says Mashayekhi. “This is because there needs to be sufficient time between each listing as there’s simply not enough liquidity in the market.”   

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