Serbia has been waiting for IPO for 75 years - The last IPO in Serbia before World War II

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Serbia is the only country in the region which has not had a single IPO recently i.e. initial public offer of shares at the stock market.

Head of the Belgrade Stock Market, Sinisa Krneta says that the last IPO in Serbia was before World War II and that the struggle of that institution has been lasting for 15 years to introduce initial public offer at the Serbian market.

Krneta thinks it would be good that the state passes for the first time through this kind of a process with a company it owns so that it would clear the way for private capital which is interested in it but steps back since it is a process which has never been tested in practice.

When asked whether problem lies in complicated procedures, Krneta says that entire regulation exists and that he would more call it sensitive than complicated but definitely long-term one.

As he explains, entire preparation process of IPO would last between six and nine months and it implies overall change with the implementation of new way of management as well as complex analysis of business and results in prospect where what is sold, what percentage, to which investors shares will go and other details are defined.

There is interest among private investors but when we say to bankers to recommend to their clients that kind of money collection at the stock market, they reply that for them it is a reputation risk since no one in Serbia has not been through that, Krneta explains.

When asked why the state is hesitating with this privatization model, Krneta estimates that it is a lack of information at key points of deciding and adds there are many reasons why IPO is an excellent way to come to fresh capital and good investors.

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He explains that IPO is not only privatization but that thus new capital enters the company which is interested in business results which leads to professional management.

This is capital which wants yield which is why it expands business and development which generates new vacancies and hires of quality staff. And then the state benefits from it from new taxes and contributions, the head of the Belgrade Stock market.

If it were not a good way to sell capital, Germany would not have privatized Deutsche Telekom and it is the way largest part of Western Europe carries out privatizations. Thus, MOL and OTP bank found buyers and the latest example Italian Poste Italiane where the state emitted a portion of company shares through stock markets and collected EUR 11 billion of fresh capital, Krneta says.

Our closest example is Croatia which had IPO long time ago for its Telekom and now it is announcing IPO for HEP and Hrvatske ceste which is a special danger for us since all capital markets in the region are competitors, Krneta says.

Initial public offer is a transaction through which a company transfers from a closed form into public open shareholder company.