Page 100 - bneIntelliNews monthly country report Russia May 2024

8.3.3 ECM news
Inter RAO announced that it had decided to acquire 3.132bn of its own shares (3% of share capital) from a minority shareholder within six months. According to the company, this transaction will avoid excessive volatility of shares in the event of a one-time sale of the stake on the market. In the future, Inter RAO plans to dispose of these shares in accordance with a medium-term strategy, which provides for several options or a combination of them: selling the package to a large strategic investor or group of financial investors, using shares as a means of paying for new assets or in an incentive (option) program.
Russian MTS Bank completed an initial public offering (IPO) at the upper end of the price range of RUB2,500 per share, floating 13.3% of the shares on Moscow Exchange, raising RUB11.5bn ($125mn) at a total capitalisation of RUB86.6bn ($938mn). MTS Bank’s IPO book was reportedly oversubscribed 15 times. As covered by bne IntelliNews, the bank expectedly offered a significant discount to the listing price. Out of RUB11.5bn placement, about RUB5bn was from retail and RUB6.5bn from institutional investors, according to Vedomosti daily. TS Bank ranked 24th in terms of assets in the Interfax-100 bank ranking at the end of 2023. The bank is owned by the telecom company MTS, 42.085% of which is owned by AFK Sistema multi-industry investment conglomerate.
Previously Sistema planned an IPO of MTS mobile operator in 2022 of up to $1bn, but the plans were botched by the fallout from the full-scale military invasion of Ukraine.
The analysts surveyed by Kommersant daily believe that MTS Bank shares could be placed at a significant discount to fair valuation, which will high investor demand and growth of share price in the first period after the placement.
According to a Kommersant source familiar with the bank's plans, the organisers of the IPO valued MTS Bank at up to RUB115bn (1.6x equity). Sberbank CIB analysts estimate the fair valuation of MTS Bank's share capital at the level of RUB105bn.
But "the bank itself wants to give the market a reasonable discount [for the placement] to allow investors to earn and create a positive investment story", sources told the daily.
Among the key advantages of MTS Bank, the analysts point to its strong position in high-marg unsecured lending (the leader in POS lending by portfolio volume with a 17% market share, among the top 10 in unsecured lending, with a 2.2% share in the credit card market and a 1.8% share in the cash loan
100 RUSSIA Country Report May 2024 www.intellinews.com