Israel’s Iron Dome and Arrow makers head toward IPOs, but the listing battle is far from over

The debate over the potential IPOs of Israel Aerospace Industries (IAI) and Rafael Advanced Defense Systems is intensifying, with the Association of Public Companies in Israel advocating for listings on the Tel Aviv Stock Exchange (TASE) rather than foreign exchanges like Nasdaq. Ilan Flato, CEO of the Association, argued that these companies are "strategic assets of the State of Israel" and should remain connected to the Israeli capital market, allowing the public to participate in their success. The government is exploring selling minority stakes of up to 30% in these state-owned defense companies, potentially generating billions, and is also considering U.S. markets due to different disclosure requirements for classified defense programs. While IAI's privatization process is more advanced, Rafael's is more complex due to its classified activities and a dispute over the offering method. Both companies are experiencing unprecedented demand and strong financial performance, with combined order backlogs exceeding $50 billion.