Company / Analytics

Analytics, 14 October 2020

Polish Amazon's debut: Allegro up nearly 60%

Polish E-commerce group Allegro shares soared nearly 60% on IPO debut
Allegro, a Polish e-commerce site ( successfully debuted on the Warsaw stock exchange on Monday, with shares soaring by 63%, lifting the company’s market valuation to 72 billion zloty ($19 billion) on the first day of trading. The share price has almost doubled since the IPO. Allegro operates in one of few business areas to benefit during the coronavirus pandemic, as shoppers switch to buying online. Allegro’s place at the intersection of technology and retail, and now being the largest stock in the Polish exchange has led some analysts to dub the stock a must-have. Read more on why Allegro could be an interesting stock for your portfolio.


Founded more than 20 years ago as a rival to eBay, Allegro is central Europe’s most recognized e-commerce brand, with its website attracting 20-million visitors a month.

The firm and its private-equity investors priced the IPO at the top end of a marketed range, cashing in on soaring demand for digital sales as consumers stuck at home indulge in virtual retail therapy.

Trading volume on Allegro shares reached about 4 billion zloty, a record daily volume for single stock in Warsaw. It stood for almost 80% of the total equity traded value on the exchange on Monday.

According to Jaroslaw Niedzielewski, head of investments for Investors TFI mutual fund, in an email to Bloomberg, “Allegro provides high exposure to the fast-growing Polish e-commerce market and draws comparison to Amazon, which may be an attractive investment option for foreign investors, who took up most of the shares in offering, but the scale of the price jump is a shock.”

Before trading started, analysts at had estimated Allegro’s enterprise value to earnings before interest, taxes, depreciation, and amortization to be about 37, above the likes leading e-commerce sites and Alibaba Group Holding Ltd, but below MercadoLibre Inc and European fashion retailer Zalando SE, according to data compiled by Bloomberg.

These wide gains represent a combination of the trends witnessed in technology and e-commerce sites this year, which is a good sector to be in the long term given recent trends. Though such a move may soften in case questions of growth and margins emerge.

Allegro is now Poland’s largest listed company and will be added swiftly to major equity indexes. Inclusion in Warsaw’s WIG20 benchmark was announced on Monday and will happen after the market closes Wednesday. Analysts anticipate that the company will also be added to the MSCI gauges at a later date, which may also fuel demand in the stock.

The Warsaw Stock Exchange delayed Allegro’s opening by 15 minutes to avoid any potential overflow of its trading system, as a substantial number of shares in the IPO were sold to a fragmented group of more than 36,000 retail buyers.

Allegro’s private equity owners - Cinven, Permira, and Mid Europa Partners’ funds - remain the controlling shareholders in the platform and pledged not to sell more shares within 180 days following the debut. Allegro will publish third-quarter earnings on November 26.


Allegro operates in one of few business areas to benefit during the coronavirus pandemic, as shoppers switch to buying online. Allegro’s strong start mirrored the performance of some recent US IPOs that have shot up on their first days of trading, demonstrating investors’ willingness to pay for growth.

Allegro is betting on the continued expansion of online shopping in Poland, a market of 38 million people, and one of the European Union’s most resilient economies. The company is touting lower fees, a loyalty program with free deliveries, and a high number of local merchants to fend off global competition. Poles have been purchasing products on from Germany, while China-based AliExpress relies on lengthy shipping processes.

For Allegro, which generates more than 80% of its revenue from fees on its marketplace, the pandemic boosted sales by 52% to 1.77 billion zloty in the first half of the year, while adjusted earnings rose 28%, as the platform became the premier selling venue for many smaller shops cut off from their clients during the lockdown. A new wave of Covid-19 infections in Poland may end up benefiting the firm, further accelerating the switch to online purchases.

Apart from the virus tailwinds, Allegro is betting on an increase in Poland’s relatively low online retail market share, which was at about 8.4% in 2019, compared with 18% in the U.K. and 27% in China.

The company also has plenty of opportunities to expand to broader Eastern European markets, which are more fragmented and easier to scale up, compared to Western Europe. However, the company is yet to announce such expansion plans and maintains that it wants to keep its focus on Polish consumers. Still, the CEO said he’s “reasonably convinced” the firm will reach customers outside of Poland eventually.

How did the stock price move?

Shares were trading at 83.81 zloty (USD 21.68) up from the IPO price of 43 zloty (USD 11.22) which was at the last price check on Wednesday afternoon in Warsaw.

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