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Online bank Kaspi (CSBN) postpones London IPO

  • Kazakh company cites ‘unfavourable’ market conditions as reason for IPO delay.
  • Floatation had only been announced three weeks ago and was set to raise $500m.
  • Kaspi delivered $203m revenue in H1 2019.

Fintech group Kaspi postponed plans for a $5bn IPO on the London Stock Exchange on Monday after citing ‘unfavourable market conditions’ in the tech sector in what will be a blow to the city just weeks before the UK is set to leave the European Union.

Kaspi, a Kazakhstan-headquartered e-commerce marketplace and payments app, only announced its intention to float in mid-September after outlining its ‘fantastic growth’ and readiness to expand operations both domestically and overseas.

“Kazakhstan itself is an extremely underpenetrated market, a growing market, innovating with new services,” CEO Mikhail Lomtadze said after confirming the share sale last month.

“And in the future, we want to be a company that exports technology — to central Asia and the Caucasus,” he continued.

Despite broader concerns about Brexit, Kaspi viewed London as a better location for an IPO than New York as it believed investors in western Europe understand Kazakhstan better.

Mr Lomtadze also said “markets are pretty good” after the filing, but the situation appears to have changed during the last three weeks.

Kaspi revealed in a statement on Monday that “unfavourable and uncertain” conditions have forced their hand despite “significant” interest from investors.

The company added: “We are pleased with the very strong interest shown by investors and their very high level of engagement in the process. However, we've come to the decision that the timing is not the best at the current moment for an IPO.

“We are looking forward to sharing the financial success of Kaspi.kz with public investors in the future.”

Full details of the listing were not divulged, but a source close to the matter has claimed global depository receipts worth $500m were set to be issued, which would have pushed Kaspi’s market cap to around $5bn.

Strong interest in the listing is not surprising considering Kaspi is not a loss-maker after it delivered a 54% hike in revenue ($203m) during the first six months of 2019.

A number of big banks were also working on the deal including Morgan Stanley, Credit Suisse and Citigroup, but a poor response to Peloton’s IPO and WeWork’s decision to shelve its float entirely has put companies on the defensive.

A London broker said on Monday: “It’s a blow to the market. I think it shows that things are hanging by a thread, there’s just not the confidence out there and of course it’s been a hell of a year for IPOs going badly.”

Kaspi, a company backed by Goldman Sachs and Barin Vostock, will now have to go back to the drawing board as it looks to support growth and expansion plans.

In other IPO news, two more large biotech deals are set to debut in the US this week with Germany’s BioNTech and San Francisco-based Vir Biotechnology looking to raise $251m and $150m respectively.