In this article, we will be taking a look at the 15 most valuable Russian companies in the world. To skip our detailed analysis, you can go directly to see the 5 most valuable Russian companies in the world.
It is impossible to discuss Russia without discussing the impact of its invasion of Ukraine, considering the impact it has had no just on Russia and Ukraine but the global economy as well. Even when all signs pointed to Russia invading Ukraine, few could believe that the country would go ahead with it, considering the implications that such a move would result in. Immediately after the invasion began, many predominantly Western countries including European Nation countries, the U.S. and the U.K. imposed heavy sanctions on Russia to pressure the country into stopping hostilities but to little avail.
Right now, Russia is mostly isolated from the international economy, barring a few friendly Asian countries such as India which have taken advantage of the situation to purchase cheaper oil from Russia. The invasion is closing in on one year, as are the sanctions, which have eroded Russia's economic outlook for future years which we'll discuss further later. Russia's financial sector has been completely decimated by sanctions as well as the impact of war, as the country's currency reserves are mostly frozen by Western nations while its access to international financing is almost non-existent as well. When the invasion first began, Russia's Central Bank had to impose restrictions on capital flows while in June 2022, Russia defaulted on its external debt for the first time in decades as its ability to make international payments has been severely hampered by sanctions. This is especially pertinent because traditionally, Russia's international financing has come from the states which are currently sanctioning it, with the country unable to sufficiently arrange sufficient alternatives. Net inflows of foreign direct investment fell to below $-20 billion quarterly in 2022 and hundreds of foreign companies have decided to abandon operations in the country especially after increasing pressure from consumers and governments too.
15 most valuable Russian companies in the world
Many of the sanctions are related to restricting exports of tech products to Russia in a bid to negatively impact the strength of the Russian army, whose prowess, or lack thereof, has already been exposed significantly in this war. Unsurprisingly, Russian imports have contracted significantly ever since the invasion began, with statistics suggesting that imports in September 2022 were 28% down from their pre-invasion levels. Due to a lack of expertise and infrastructure, Russia has always been highly dependent on tech imports, and with the sanctions, has depended more on China and Turkey for imports, though this hasn't been able to fully make up for lost high-tech imports. Because of this, Russian industries dependent on high-tech products such as TV receivers and excavators have contracted significantly, though luckily for the nation, these industries are only a small percentage of its total economy.
It's not just Russia's import industry which has been impacted by the sanctions, as its export sector has contracted heavily too. These sanctions have been focused on Russia's key goods including oil and refined petroleum products, gold, timber and coal among others. Some of these sanctions have been comparatively half-baked in an effort to reduce the impact on the economy of sanctioning nations, though the other effect of this decision has been to soften the impact on Russia's economy as well. On the other hand, some of its major industries such as the wood industry and the iron and steel industry have declined significantly after Russia's invasion. All of this has resulted in the most valuable companies in Russia falling significantly in value.
However, Russia's oil industry has barely struggled even as its non-oil GDP has contracted by 5%. The European Union, which is the biggest customer of Russia's oil, has seen its restrictions on oil purchase from Russia only come into effect in December 2022, which is one of the reasons Russia's oil industry has maintained momentum in 2022. However in a bit to pressure European countries, Russia has cut off gas supply to several European countries citing their refusal to pay in roubles, which in turn has resulted in a major European energy crisis as prices have ballooned due to limited supply. Many major oil companies have taken advantage of this to post record profits including Exxon Mobil Corporation (NYSE:XOM), BP p.l.c. (NYSE:BP) and Shell plc (NYSE:SHEL), with the latter recently posting its highest profits ever in its history. To counter this, the European Union has imposed a windfall tax on such companies so that they do not benefit too much from their higher profits as a result of higher energy prices.
Even before the invasion and consequent sanctions, Russia's economic growth was quite slow, and was estimated at 1.5% in 2022. Low levels of productivity, low investment rates and unfavorable demographic trends are all already hampering its long-term growth and the impact of continued, and increasing sanctions, are definitely going to add to its long term woes. The Russian stock market tanked after its invasion of Ukraine even as some Russian oil companies have seen minor successes. Because of the impact of sanctions, the Russian stock market continues to suffer. Even before the invasion, the MOEX Russia Index plummeted from 36,83.95 to 2,058.12 when Russian troops were gathered on the border between February 16 to February 24. Currently, it's not even close to 3,000 right now.
The most valuable stocks in Russia may have suffered in 2022, but even the lowest value company is worth well over $4 billion. The 15 biggest companies combined are worth nearly $350 billion, with the top 4 alone accounting for nearly $220 billion. It wasn't an easy feat to determine their valuation, as there are few similar lists. We checked the market cap of the top 35 Russian companies in the latest Forbes 2000 list, determined the updated market cap from either Bloomberg or Yahoo Finance, and converted all amounts to USD. So, let's now take a look at the giants of a failing country, starting with:
15. United Aircraft Corporation
Total market cap as at 3rd Feb 2023 (in billions): $4.7
The most valuable aerospace and defense company in Russia, United Aircraft Corporation was sanctioned by the British government after Russia invaded Ukraine in February 2022. In June 2022, military aircraft producers Sukhoi and Mikoyan were annexed by United Aircraft Corporation.
14. RusHydro
Total market cap as at 3rd Feb 2023 (in billions): $5.0
The largest hydroelectricity company in Russia, RusHydro was part of U.S. sanctions against Russian individuals, organizations and companies.
13. Magnitogorsk Iron and Steel Works
Total market cap as at 3rd Feb 2023 (in billions): $5.0
The steel and energy industries in Russia provide the majority of its most valuable companies. Magnitogorsk Iron and Steel Works have substituted some of their eurobonds for ruble debt.
12. Magnit
Total market cap as at 3rd Feb 2023 (in billions): $6.2
Magnit is the most valuable retail chain in Russia with over 26,000 stores, 359,000 employees, 45 distribution centers and 17 production facilities.
11. Severstal
Total market cap as at 3rd Feb 2023 (in billions): $9.7
The second most valuable steel company in Russia is Severstal, whose majority shareholder Alexey Mordashov was part of European Union sanctions in February 2022. This resulted in the company ending shipments to Europe.
10. Novolipetsk Steel
Total market cap as at 3rd Feb 2023 (in billions): $11.7
The most valuable steel company in Russia, Novolipetsk Steel boasts over a fifth of the total domestic market share. With revenues of over $16 billion in 2021, Novolipetsk Steel is also among the biggest Russian companies by revenue in addition to being counted among the most valuable Russian companies in the world. Currently, the company has over 60,000 employees.
9. Transeft
Total market cap as at 3rd Feb 2023 (in billions): $12.7
Transeft is a pipeline company which is controlled by the state of Russia. The biggest oil pipeline company in the world, Transeft was part of the economic sanctions levied by the U.S. in response to Russia's invasion of Ukraine. The company's pumping station was shelled recently, though it reported that its pipeline was operating normally since.
8. Tatneft
Total market cap as at 3rd Feb 2023 (in billions): $13.0
Oil and gas companies heavily dominate the most valuable Russian companies in the world and Tatneft is no exception. The vertically-integrated oil and gas company owns most of the exploration and production licenses in Tatarstan and it reported revenues exceeding $17 billion in 2021 alone.
7. Surgutneftegas
Total market cap as at 3rd Feb 2023 (in billions): $14.4
Surgutneftegas is an oil and gas companies which owns vast oil reserves in Siberia.
6. Rusal
Total market cap as at 3rd Feb 2023 (in billions): $16.4
The second largest aluminum company in the world, Rusal is headquartered in Moscow and recorder revenue of $8.6 billion in 2020.
