Israeli Defense Firm Tomer Plans Bond Offering Amid Regulatory and Market Hesitation

The Israeli Government Companies Authority announced plans to publicly list Tomer, a state-owned defense company specializing in rocket propulsion systems, within two to three years. Tomer, established in 2015 after splitting from Israel Military Industries, produces engines for Arrow missiles, artillery rockets, and satellite launchers. Initially, Tomer will issue institutional bonds on the TASE UP platform, which targets qualified investors and allows companies to avoid full public reporting requirements while maintaining some transparency through audited annual financial statements.

Tomer reported annual revenues of 650 million shekels and a net profit of 41 million shekels. The company’s rocket propulsion division remained under government control after the 2018 privatization of Israel Military Industries, due to the sensitive nature of its work. In 2025, Tomer paid its first dividend to the state, amounting to approximately 18 million shekels. The Government Companies Authority projects that Tomer’s per-employee output will rise from 250,000 shekels to one million shekels by the decade’s end, indicating readiness for public trading. Based on profitability and industry comparables, Tomer could seek a valuation exceeding two billion shekels.

Despite these plans, market underwriters express skepticism about Tomer’s ability to become a publicly traded company, citing challenges with corporate governance and financial reporting for a classified defense firm. The ongoing public offering of Israel Aerospace Industries (IAI) also complicates timing, as other defense IPOs are unlikely before IAI’s process concludes. Additionally, Tomer’s classified status requires Ministry of Defense approval for public exposure, which is pending a comprehensive internal review. Government approval is also necessary but unlikely before the upcoming October 27 elections.

Parallel efforts to list Rafael Advanced Defense Systems and IAI face similar hurdles. Rafael lacks government approval and faces Treasury opposition, while IAI’s listing is more advanced but may be delayed until a new government forms. The announcement about Tomer follows recent statements that the energy company KESAC is also a candidate for public offering, despite controversies and confidentiality issues.

Tomer confirmed it is progressing with the institutional bond issuance under the supervision of the Government Companies Authority and Ministry of Defense, and will consider a stock offering if supported by regulators.