Hidroelectrica listing


31 March 2022

Hidroelectrica's shareholders (Ministry of Energy and Fondul Proprietatea) approved in the company's general shareholders' meeting, the initiation of the listing process of Hidroelectrica’s shares on the Bucharest Stock Exchange following a public offering of the company’s shares held by Fondul Proprietatea.


Dual listing

In order to ensure the success of the listing, which is promising to be a landmark transaction in the current European context, our view, as the selling shareholder, is that a dual listing of Hidroelectrica should be pursued. This would take place on the Bucharest Stock Exchange as the main market, and a suitable international market, such as the London Stock Exchange as a secondary listing venue, given the existing ties of listed Romanian entities. This will help to ensure that the listing is accessible to the widest possible pool of investors and create an environment where the true market value will be fully realised. A dual listing has the potential to cement Hidroelectrica as the most valuable Romanian company, public or private. 


Key points showcasing why a dual listing would be highly recommended:

  • With an expected transaction size of potentially over USD 2.3 billion or RON 10.4 billion* (for a 15% stake), Hidroelectrica is estimated to be the largest initial public offering and listing (“IPO”) in the history of a Romanian company, exceeding multiple times the value of the Electrica IPO (USD 604 million dual listed on the BVB and LSE), and more than 10 times larger than the largest IPO carried out exclusively on the BVB (DIGI Communications – USD 204 million). Even by European and international standards, Hidroelectrica’s offering, and listing is rightly considered a very large transaction.
  • According to preliminary feedback received from banks, based on the experience of previous IPOs, for companies the size and profile of Hidroelectrica, to accomplish the successful listing that correctly values the company and supports its stock-price evolution post-IPO, the cumulated value of orders placed by investors should be at least between 2-3 times the size of the actual listing – this means generating gross demand in excess of USD 6.9 billion (RON 31.2 billion). The dual listing of Hidroelectrica is critical in order to achieve the listing of 15% of the shares. In the absence of a dual listing the main risk is that the size of the transaction would have to be reduced, with negative impact on the value of the company and the further evolution of the share price post-listing. As the selling shareholder, the Fund intends to ensure that at least 50% of the shares are allocated to investors on the BVB.


  • A higher valuation of Hidroelectrica through a dual listing will benefit the Romanian Government as the majority shareholder of the Company, Fondul Proprietatea’s shareholders, including the 8,000 Romanian individual shareholders of the Fund, as well as the Romanian pension funds with over 8 million contributors. It would also attract more private companies to list on the BVB and will likely lead to increased valuations for the other flagship companies listed on the BVB.


  • A successful dual listing will help the Romanian Government to fulfil the requirement under the National Resilience and Recovery Plan (“PNRR”): listing a stake of at least 15% of Hidroelectrica until 30 June 2023. The dual listing will definitively support the ongoing transition to Emerging Market status of the BVB; as proven in the dual listings of Romgaz, Electrica, and Fondul Proprietatea, liquidity transfers over time to the main market, which, as a result of the structure proposed by Fondul Proprietatea for the IPO, will be the BVB.


  • The dual listing of Hidroelectrica will bring research coverage of the Company by a large number of international banks, during and after the listing. Additional research coverage will contribute to a better understanding of the company and ultimately the Romanian capital market, which increases confidence and valuations. The company is estimated to be the largest company on the BVB and one of the largest electricity producers listed on any of the European stock exchanges, thus highly visible.


  • A unique equity story within the European renewable energy space, the Hidroelectrica IPO could generate interest from a very broad base of investors, beyond those investors who regularly invest in Romania or the region and would bring extensive international media coverage of Hidroelectrica and Romania through global media outlets.


  • Finally, the dual listing of Hidroelectrica should be regarded as a technical decision to ensure the success of the listing and to minimize the risk, as an opportunity to attract new investors in Romanian companies, and as a strong commitment about the openness of the Romanian business environment towards international capital.