Kaspi.kz's IPO Debut Sees Valuation of $17.51 Billion Amid

Kaspi.kz, the Kazakhstan-based banking and fintech giant, made its much-anticipated debut on Friday with its shares opening 0.5% above their offer price. The company, valued at $17.51 billion during its IPO, fetched $1 billion for its investors in an upsized initial public offering (IPO), signaling a lukewarm reception from investors amidst cautious market sentiment.

The modest debut of Kaspi.kz comes at a time when the benchmark S&P 500 index was on the cusp of a record close, indicating that investor caution around new listings remains prevalent in 2024, following almost two years of sluggish U.S. IPO markets.

Despite the tepid response, a wave of startups, including Reddit and ServiceTitan, are poised to go public in the coming months, buoyed by dovish expectations surrounding the Federal Reserve’s interest rate trajectory.

Kaspi.kz’s American depositary shares (ADS) opened at $92.50 each,which is a bit up from its IPO, priced at $92. The share sale resulted in over $1 billion fall for the company’s billionaire executives, co-founder Vyacheslav Kim and CEO Mikheil Lomtadze, including for the shareholder Asia Equity Partners. It is to be noted, no proceeds from the IPO went to the company itself.

The IPO saw investors planning their offering more, 11.3 million shares on Thursday, up from the initial plan of selling 9 million shares.

Operating across three segments – payments, marketplace, and fintech – Kaspi.kz caters to both consumers and merchants. Its services range from e-commerce purchases to facilitating buy now, pay later (BNPL) debt, renewing driving licenses, and business registration through its app.

The company’s diversified portfolio presents potential benefits to investors, as different segments can offset losses in others. However, the sprawling empire also poses risks, making it challenging for markets to evaluate the company’s overall performance. For instance, Kaspi.kz’s e-grocery business, known for its logistical complexity and low-margin nature, adds a layer of complexity to its operations.

Morgan Stanley, J.P. Morgan, and Citigroup served as the lead underwriters for the IPO.

While the company is already listed on the London Stock Exchange, where its valuation exceeds $19 billion, its entry into the U.S. market represents a significant milestone in its growth trajectory.

As Kaspi.kz navigates the intricacies of the public market, investors will closely monitor its performance and strategic initiatives, evaluating its potential to deliver value amidst evolving market dynamics and investor sentiment.