The Moscow Exchange priced its initial public offering (IPO) at the bottom of the expected price range on Friday in the largest ever offering launched solely on a Russian platform.
The IPO, which values the exchange at around 126.9 billion roubles ($4.2 billion, comes as the Russian government attempts to establish Moscow as a financial hub to rival London, New York and Tokyo. The BRIC nation is trying to boost its presence in the capital markets by enticing domestic companies to list locally.
However, investors flagged concerns about low valuations on the exchange, as well as corporate governance and corruption concerns about Russian companies in general.
The IPO, which raised 15 billion roubles ($500 million), is priced at the lower end of the indicated range at 55 roubles ($1.82) per share and the bourse opted not to up the total offering to 20 billion roubles, having previously said it would so if investor interest proved sufficient.
"You have to say that 55 roubles is of course to some extent a disappointment," Oleg Dushin, chief analyst at Zurich Capital Management, told Reuters.
"Investors were wary because the exchange was conducting at a valuation that was more expensive than the London Stock Exchange."
However, Evgeny Fetisov, chief financial officer of the Moscow Exchange, told CNBC on Friday that the deal was oversubscribed multiple times, predominately by institutional investors.
"The difference between the London market and our market… In Russia we see a lot of positive changes taking place in order to bring more demand-side local pension funds and retail money here," Fetisov said.
He added that concerns about the high volatility of Russian exchanges were outdated.
"The depth of the market was not sufficient. There was a lot of hot money coming in and out. Now with more pension money coming in, we have a deeper market."
The Moscow Exchange is the largest bourse in terms of turnover and client base in Eastern Europe. It was founded on December 19, 2011 as a result of the merger of Russia's two main exchanges at the time, the Moscow Interbank Currency Exchange and the Russian Trading System.
Early on Tuesday, Reuters reported the flotation was already fully covered, with China's sovereign wealth fund, the CIC, seeking to match the stake taken by state-backed Russian Direct Investment Fund.
- By CNBC's Katy Barnato