Brokers believe Hidraulica Plopeni's IPO could set an example

Some of the brokers on the market say the initial public offering of hydraulic pumps producer UM Plopeni, which starts today, will serve as an example for many local businesspeople who want to carry out such an operation, aimed at attracting capital from the Stock Exchange.

Hidraulica Plopeni is the first private company to test stock exchange IPOs after a two-year dry spell because of the crisis.
The latest company that was able to raise capital from the market was Teraplast Bistrița (TRP) through an offering carried out in April 2008, worth nearly 50 million RON, before the effects of the crisis were fully felt.
The failure of the initial offering carried out one month later by construction materials producer Pomponio in Alba Iulia turned managers away from this method of financing.
“Because initial public offerings are so rare with private companies, Hidraulica Plopeni’s IPO is interesting to watch despite its low value. I think it will stir interest and give important clues to those who want to take this step in the next period. It could set an example for other businesspeople who want to use stock exchange financing,” says Mihai Chișu, broker at IFB Finwest brokerage.