Brazil ready for more agriculture sector IPOs, seed company chief says

The Brazilian market is ready to welcome more agribusiness companies on the stock market, a sector underrepresented on the local bourse based on the size of the industry relative to Brazil's GDP, Marino Colpo, chief executive of listed seeds producer Boa Safra (SOJA3.SA), said on Thursday.

"I'm a big believer in the next (IPO) window," said Colpo, who leads one of the last agriculture sector companies to go public.
During a panel discussion hosted by an investment bank, Colpo said there remains a great distance between investors and the countryside of Brazil, the biggest producer of staples like soybeans, coffee and sugar.

Still, more and more financial houses are adding agribusiness specialists to their teams.

"Increasingly, we are in contact with people who are specialists in agribusiness," Colpo said. "This shines a light (on the fact) that assets managers and investment funds are prepared for a new arrival of agribusiness companies (to the stock market)," he said.
Brazil's booming farm sector accounts for around 25% of the national GDP, considering the industries and services, Colpo noted.
For that reason, it is important that investors are educated about the sector, where the typical seasonality of crops often affects companies' results, he said.

Fabio Nazari, a partner at investment bank BTG Pactual, who moderated the panel Colpo took part in, also showed confidence in a new wave of agribusiness IPOs.

"The agribusiness sector is underrepresented on the Brazilian stock exchange, based on what it means for Brazil and the countries in the world," Nazari said.

BTG's credit exposure to Brazilian agribusiness companies is almost 20 billion reais ($3.70 billion), or around 20% of its loan portfolio, bank CEO Roberto Sallouti said.

In two years, BTG led share offerings for almost 11 billion reais, he said.