100 production companies to be listed on stock exchange by Mar. 2021

June 1, 2020 - 10:27

TEHRAN- Iran’s deputy industry, mining and trade minister said that 100 production companies are projected to be listed on the stock exchange of the country by the end of the current Iranian calendar year (March 20, 2021), IRNA reported.

Saeed Zarandi, the deputy industry, mining and trade minister for planning, also said that according to the schedule the stock market will witness one company’s initial public offering (IPO) or securities publishing each week.

Making the remarks during a meeting on expanding financial resources for the production sector through capital market, the official noted, “According to the previous years’ investigations it was found that the main problem in industry and production sector and also trade sector is lack of liquidity, and it is while the country is facing a high volume of liquidity.”

There are various methods in the world to lead the capital toward production, Zarandi stated, adding one of these methods is leading the micro capitals toward production units and the stock market is one of the best ways to do so.

On April 25, Finance and Economic Affairs Minister Farhad Dejpasand said the production by the companies listed on the country’s stock market increased by 7.1 percent during the 11-month period from March 21, 2019 to February 19, 2020.

Speaking in a meeting with the country’s businessmen and directors active in the stock market, Dejpasand noted that this figure is an indication that “we should move toward new strategies to design [economic] mechanisms so that public resources and funds are directed into the capital market.”

The economy minister said that the capital market is not exposed to the negative impacts of other markets, adding that this market has a special role in the economy and can quickly fill one of the missing links of the financing of projects in the country.

The official underlined the need for establishing a trust for the country’s big companies and organizations to come forward and offer their shares in the stock exchange.

He further noted, “The first offering of the shares of state-owned enterprises in the stock exchange was announced today and the worth of offering is 165 trillion rials (about $3.9 billion), and two more offerings will be held in near future.”

“Along with such government-owned companies, we also saw non-governmental organizations such as Shasta, whose initial public offering took place [on April 15], and the rest have announced both their readiness and their plans,” he added.

Earlier on April 15, Social Security Investment Company (SSIC, also known by its Persian acronym Shasta) offered eight billion shares, which account for 10 percent of its stakes, for sales at the Tehran Stock Exchange (TSE), Iran’s major stock market.

Capital increase by the companies listed on Iranian stock market has risen 75 percent during the past Iranian calendar year (ended on March 19), according to an official with Iran’s Securities and Exchange Organization (SEO).

Ali Beigzadeh, the SEO’s director for supervising the primary market, said his department has issued capital-increase permits for 146 companies in the past year.

The current Iranian calendar year (began on March 20) is named the year of “Surge in Production” by the Leader of Islamic Revolution Ayatollah Seyed Ali Khamenei.

While materializing this motto requires all-out cooperation between the state-owned and private bodies, the country’s stock market is taking some big steps to play a significant role in this due.

The market is trying to attract the liquidity existing in the society toward production and development projects, and many ministries and organizations including Ministry of Transport and Urban Development have already announced that they are planning to fund their development projects through the stock market.

As announced by deputy transport minister for resource planning and management on May 20, the ministry plans to offer 14 infrastructure projects to be financed through the country’s stock market.

“Studies have been concluded for 14 infrastructure projects for entering the capital market, and investment companies are assessing various methods and models of offering this projects in the stock market,” Amir-Mahmoud Ghaffari has told ILNA.

According to Ghaffari, seven railway projects and seven freeway projects will be offered in the capital market, and the transport ministry is considering which of these projects should be the priority.

“This is the Transport and Urban Development Ministry’s first experience in this area and we are designing a model for its implementation”, the official explained.

He further noted that the ministry is holding several meetings with the Securities and Exchange Organization (SEO) to plan the model and approach for these projects to enter the market, adding that investment companies are developing a proposal for the stock exchange.

Referring to the schedule for the offerings, the deputy minister said, "We are trying to offer the projects in the capital market in the first half of the current [Iranian calendar] year (started on March 20).”

“At the first stage, two projects will be listed,” he added.

MA/MA

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