The Moscow Exchange was set for a relatively disappointing flotation Friday after Russia's main trading platform was valued at $4.2 billion, well below its own valuation estimates.
The news deals a blow to President Vladimir Putin's efforts to transform Moscow into a global financial centre and underscores analyst mistrust of a bourse now mired by low volumes and regular trading in just a few big stocks.
The exchange -- formed in a 2011 merger of the MICEX and RTS trading floors -- had set its floatation price range at 55-63 rubles ($1.84-$2.10 / 1.34-1.55 euros) per share.
A good result would have valued the company at $4.6 billion (3.4 billion euros). But the exchange said the price had been set at 55 rubles after a 10-day roadshow. Trading was due to open Friday afternoon.
Company officials put a brave face on the situation by pointing out they met their main goal of raising $500 million that will go toward IT improvements and boosting the capitalisation of its clearing subsidiary.
"Today's announcement marks an important moment for Moscow Exchange and for the Russian capital markets," said its chairman Sergei Shevtsov.
"Having successfully placed 15 billion rubles ($500 million), Moscow exchange is strongly positioned to develop as a major global trading venue across multiple asset classes," Shevtsov said in a statement.
The price tag on Russia's home of both stock and bond as well as derivatives trading is less than the $4.5 billion valuation the merged company earned two years ago.
The dip reflects the hardships Russian stocks have suffered amid fears by Western investors to emerging market risk since the recent global economic downturn.
But analysts also warn that the exchange's suggested price-to-earnings ratio of around 15 made it too expensive compared with its Western counterparts.
The authorities had hoped that a successful IPO would help encourage others to forgo financial capitals such as Hong Kong or London and list in Moscow.
Putin had initially set the goal of turning Moscow into a global financial centre rivalling London and New York while still serving as Kremlin chief in 2000-2008.