Czechoslovak Group's shares rose as much as 32% in their Amsterdam debut, pushing its market capitalisation to more than €30 billion following a record fundraising for a defence company listing.
CSG, seeking to tap into a surge in military spending, sold 30 million new shares and up to 122 million existing shares, including an over-allotment option, in an initial public offering priced at €25 each, raising up to €3.8 billion.
Michael Strnad, the 33-year-old owner of the company, will net just under €3 billion in the deal, including the over-allotment, while the rest of the proceeds will go to the company, CSG said.
The offering for up to 15.2% of the company gave CSG an initial market capitalisation of €25 billion. By 9.43 am on Friday, CSG's market value had risen to €31.6 billion with shares trading at €31.60, up 26.4%. They had climbed as high as €33.00 in early trading.
Tapping into defence sector boom
Investors are piling money into the sector and European governments pledge to ramp up defence spending following Russia's invasion of Ukraine. European defence stocks have touched record highs this year.
Strnad told Reuters this month that one of the reasons for the listing was to use stock as potential acquisition currency. Recent acquisitions include its $2.2 billion purchase in 2024 of leading U.S. small ammunition maker Kinetic, owner of brands such as Remington.
At current prices, CSG has a larger market capitalisation than Czech utility CEZ, the country's biggest listed company.
CSG's key customers include Ukraine and it is one of the world's fastest‑growing defence companies, producing large- and small-calibre ammunition, heavy ground equipment and radar.
Order books attracted swift demand
If fully exercised, CSG's offering would be the largest Amsterdam listing since KKR Private Equity Investors raised $5 billion in 2006, according to Dealogic.
Other large European defence groups, such as Franco-German tankmaker KNDS, are also set to list this year.
Order books on the CSG offering were quickly covered on Tuesday, a bookrunner said. Funds managed by Artisan Partners, BlackRock and Al-Rayyan Holdings, a subsidiary of the Qatar Investment Authority, have committed to cornerstone the deal with 300 million euros each.
Led by Strnad, whose father began trading old Soviet-era military equipment in the 1990s, CSG has built up its order pipeline and said in November that revenue would rise to 7.4–7.6 billion euros this year, from the more than 6.4 billion expected for 2025.
It targets a dividend payout of 30%-40% of net profit, payable from 2027.
