When we first backed Shelly Group (it was Allterco then in 2015), we did so with the conviction that good businesses eventually find their audience, wherever they happen to be headquartered. These days, that conviction got another important validation: Shelly Group has been included in the SDAX, becoming the first Eastern European company ever to enter one of Deutsche Börse’s selection indices. This is nothing short of spectacular. And it just has happened in less than two years’ time since Shelly started trading on XETRA platform
We wanted to take a moment to set this milestone in the context of time – where Shelly has come from, what the SDAX is, and why these matters for the road ahead.
Shelly’s Journey: From a Local Listing in Sofia to Frankfurt’s Small-Cap Elite
Shelly’s capital markets story is, in many ways, a mirror of its operational one – in one of our previous Insights, we defined Shelly’s archetype as “the marathon runner” – paced, deliberate, and ultimately reaching further.
The company first listed on the Bulgarian Stock Exchange in December 2016, back when it was still known only regionally. That listing gave Shelly a domestic shareholder base, the “first class” of public reporting, and crucially – a track record. For years, it was a Bulgarian micro- cap that happened to be quietly building one of Europe’s most interesting IoT product lines.
The next step came in November 2021, when Shelly secured a listing on the Prime Standard of the Frankfurt Stock Exchange. Listing in Frankfurt brought the company closer to its customers, its DIY community, and, importantly, to a much deeper pool of European investors.
Then came the breakthrough. At the end of April 2024, Shelly was admitted to trading on XETRA, Deutsche Börse’s electronic trading platform and in doing so became the 1st Bulgarian company ever to trade on XETRA. That admission was the unlock. XETRA is where institutional money dwell in German equities; it is the difference between being technically tradable and being genuinely investable for a large institutional player.
18 months later, here we are.
What Exactly is the SDAX?
Deutsche Börse operates a family of equity indices that form a pyramid of German listed companies. At the top sits the DAX with the 40 largest blue chips – names like SAP, Siemens, and Allianz. Just below it is the MDAX, covering the 50 mid-cap companies that follow the DAX in size. And below that sits the SDAX, which tracks the 70 small-cap companies ranked by free-float market capitalization that fall below the MDAX.
The qualification criteria are not trivial. To be even considered, a company must:
1. be listed on the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange, trade continuously on XETRA
2. have a minimum free float of 10%
3. have a minimum order book volume over the last 12 months of EUR 1 bln. or turnover rate of minimum 20%
4. and meet all ongoing obligations for transparency that come with being public.
In other words, you don’t lobby your way into the SDAX. You qualify for it in a competitive fashion – by being liquid enough, and transparent enough that Deutsche Börse’s rules-based methodology has no choice but to include you.
Few Thoughts on Liquidity
One of the more persistent misconceptions in capital markets is that liquidity is something a company receives the moment it rings the trading bell. Actually, it isn’t. A listing gets you a ticker; it does not get you buyers and sellers willing to transact in size, on tight spreads, every single trading day. Liquidity has to be built – deliberately, day-by-day, over years.
We should be clear about what we mean, because there is a parallel universe in which liquidity does appear out of thin air: speculative micro-caps and pump-and-dumps, where high-frequency traders happily provide all the volume you could ask for because volatility itself is the opportunity. That isn’t liquidity in any meaningful sense – it is noise disguised as liquidity, and it disappears the moment the story fades.
Real, durable liquidity – the kind that lowers your cost of capital and survives a bad quarter – rests on a handful of unglamorous fundamentals:
• a business that performs and hits its numbers
• corporate governance that meets international standards, with independent directors possessing high integrity
• best-in-class reporting that is timely and clear
• sell-side and buy-side coverage earned through genuine engagement
• a free float and shareholder structure that make the stock investable at scale
• and – most underrated of all – the discipline to do all the above consistently, for years rather than quarters.
What Does Membership Actually Mean for a Company?
Several things, all of them meaningful:
Passive flows – A wide range of ETFs, index funds, and benchmarked institutional mandates track the SDAX. Inclusion mechanically creates buying that simply did not exist before.
A new investor universe – Many European institutional investors – particularly in the German-speaking world – have mandates that restrict them to constituents of recognized indices. The day a stock enters the SDAX is the day it appears on hundreds of screens it was previously invisible on.
Analyst coverage – Sell-side research desks tend to cover index constituents far more systematically than non-constituents. More coverage means more price discovery and, over time, narrower bid-ask spreads.
A credibility stamp – Index membership is, fairly or not, treated as a quality marker by corporate counterparties, banks, and prospective hires. It signals that a company has cleared a meaningful institutional bar.
Fifth, and perhaps most importantly – none of these change the underlying business, and that is precisely the point. The SDAX inclusion reflects what Shelly’s team has built, not a cause of it. The company is still the same fast-moving, founder-driven business it was last week. It is still the same company that can take a product from idea to launch in a few months. What has changed is that a much larger audience now has a reason to pay attention.
Engineering Liquidity: How Discipline Turns Credibility into Index Inclusion
Shelly’s path to the SDAX is a textbook example of of liquidity engineering, we call it opening the liquidity windows. The corporate governance playbook applied by IMPETUS, double listing, XETRA admission, the SE conversion, the steady drumbeat of hitting guidance – none of these were accidents. Each one was a brick in a wall that, taken together, made index inclusion not something to consider but a natural result.
Liquidity follows credibility, and credibility is the compound interest of small, consistent, boring steps and decisions made over a long period of time. Companies that understand this build durable shareholder bases, attract the kind of investors who measure their holding periods in years rather than days, and eventually find that the market stops asking where they are headquartered and starts asking how fast they can grow.
Disclaimer
This publication is produced by Viktor Manev as an individual and, for avoidance of doubt, not acting in his capacity of IMPETUS Capital’s managing director, is completed on April 16, 2026. Viktor Manev, via IMPETUS Capital and managed by the latter companies, currently holds shares of Shelly Group SE (ISIN: BG1100003166) which may constitute potential conflict of interest. An independent member of the board of Shelly Group SE is a shareholder and a managing partner in IMPETUS Capital which may constitute potential conflict of interest.
This publication, produced by Viktor Manev, is first disseminated by IMPETUS Capital on April 16, 2026 with modification thereafter by the author. The content published by IMPETUS Capital including articles, podcasts, and newsletters reflects the personal opinions of the authors affiliated with the firm and does not represent the official views of IMPETUS Capital, its subsidiaries, or affiliates. This content is provided for informational purposes only and should not be construed as investment advice, a recommendation to buy or sell any security, digital asset (such as cryptocurrency), or other financial instruments, nor as a basis for making investment decisions. It does not constitute a research report. Any third-party information referenced does not necessarily reflect the views of IMPETUS Capital or its related entities. All investors should execute their own due diligence in making investment decisions. All investments involve risk, including the potential loss of capital. Past performance is not indicative of future results.
