CSG IPO: A brand new protection inventory taking off | EUROtoday

The Prague-based protection firm CSG entered inventory buying and selling with vital income on its inventory market debut on Friday. The opening value on Friday morning was 32 euros, 28 % above the problem value of 25 euros. At that value, the corporate, which was beforehand privately owned by entrepreneur Michal Strnad, put 132 million shares available on the market on Friday and raised 3.3 billion euros. It was the world’s largest IPO of a pure protection firm.

Strnad, who inherited the corporate from his father in 2018 and has since expanded it considerably, offered shares for two.55 billion euros. He can nonetheless promote securities for 496 million euros by way of an over-allotment possibility. 750 million euros from a capital enhance will profit the growth of the Czechoslovak Group (CSG), which produces primarily in Europe and America.

According to Swedish peace researchers at SIPRI, the producer of grenades, small-caliber ammunition, armored automobiles, howitzers, radars and drone elements is Europe’s fastest-growing protection firm. In the primary 9 months of 2025, gross sales rose by 82 % to 4.5 billion euros, and adjusted working revenue earlier than curiosity, taxes, depreciation and amortization reached 27 %. In view of the safety state of affairs and the rearmament efforts of not solely NATO nations, CSG expects enterprise to develop completely.

Since Friday, non-public buyers have additionally been in a position to guess on the brand new protection worth, after solely institutional buyers had been allowed to subscribe. It was scheduled for Tuesday and was exceptionally brief at simply three days. Strnad explains this by saying that “there was a lot of interest and we didn’t want to delay the process or take market risks.” Anchor buyers reminiscent of Blackrock and the Qatar sovereign wealth fund had beforehand secured shares value 900 million euros.

With a web value of 37 billion euros, in line with the Bloomberg company, the 33-year-old father is by far the wealthiest individual within the Czech Republic. The shares of the second largest grenade producer in Europe after Rheinmetall didn’t make their debut in Prague, however on the Euronext inventory trade in Amsterdam. This was the most important IPO because the Polish parcel field supplier InPut up was issued 5 years in the past. At the identical time, the CSG shares had been listed – as elsewhere – on the open market of the Prague Stock Exchange. This was a comfort for CSG’s dwelling market, which might have been too small to digest the massive subject.

Nevertheless, the CSG subject has apparently shaken up the market in Prague. The profitable PX index on the Prague Stock Exchange fell by nearly 4 % when the subscription interval began on Tuesday. The essential cause for this was the autumn within the shares of the Prague vitality firm České energetické závody (ČEZ), first by 4 % on Monday, then by greater than eleven % on Tuesday. There was just one cause for this that satisfied commentators: institutional buyers needed to money in to lift short-term cash for the CSG IPO, which was accomplished surprisingly rapidly.

The incontrovertible fact that Prague’s Economics Minister Karel Havlíček brought about the crash together with his statements on the weekend in regards to the nationalization of the corporate, which is already 70 % owned by the state, as initially suspected, in the end appeared the least believable.

More like “profit-taking,” which is what Petr Bártek, the senior fairness analyst at Česká spořitelna, which is a part of Erste Group, speaks of. Bártek advised the FAZ that he had seen “no significant change in the government’s attitude.” In basic, the value of ČEZ shares was supported by the federal government’s plans to purchase out buyers.

In reality, the nationalization fantasies of the coalition led by ANO chief Andrej Babiš, which has been in energy because the flip of the 12 months, had already pushed the ČEZ value steadily upwards final 12 months. In the top, the value of the vitality firm, which is accountable, amongst different issues, for the Czech nuclear growth program, had elevated by 35 % over the 12 months.

That was quite a bit for the most important of the eleven shares within the Prague prime market, however little in comparison with the 52.6 % enhance with which the PX index left different European inventory exchanges behind final 12 months. The Vienna Insurance Group (VIG) led the way in which, greater than doubling its share value to 115 %. The shares of Doosan Škoda Power, which was solely listed in February, rose by no less than 74 %. The Korean turbine producer from Pilsen performs an essential function within the growth of nuclear energy, by which the Czech Republic plans to take a position 16 billion euros.

Financial shares had been the drivers of inventory market enterprise in 2025, says Bártek. They had been additionally in a position to profit from the overall upswing in East-Central and Southeastern Europe elsewhere. “The housing market in the Czech Republic is booming, unemployment is hardly affected by the weaker automotive industry, employees are enjoying significantly rising real wages and falling energy costs,” he summarizes the state of affairs. For the present 12 months, Bártek expects continued stable development in Prague, though not as sturdy as final 12 months. “Nevertheless, the Czech market offers a nice dividend yield, which should raise the total return to high single digits.”

Fans of protection shares will even discover what they’re searching for in Prague past CSG, for instance with the firearms and ammunition producer Colt or the drone producer Primoco. Colt solely reported in December a couple of main order from the Bundeswehr, which had chosen a pistol from its subsidiary CZ as its new commonplace sidearm. Colt will profit in the long run from Europe’s obligatory rearmament, stated analyst Bártek. The smaller UAV producer Primoco, then again, “could be an interesting bet for a possible takeover by a larger defense group.”