Over a decade after initial intentions to go public were revealed, the Kazakhstan state-owned oil and gas business finally made its stock exchange debut, concluding the year with a $330 million financial inflow, Eurasia Net reported.
A delayed privatization effort is given fresh life by the launching of KazMunaiGaz (KMG) shares on the stock exchanges in Astana and Almaty.
According to the value of the final sales as well as the number of bids received, KMG’s initial public offering (IPO) was the biggest ever on the Kazakhstani stock market.
The results, however, suggest that investor interest in purchasing shares of significant Kazakh firms may not be as great as Astana would want, given that the IPO was undersubscribed.
Only 3% of the shares that KMG offered for sale to investors were purchased.
In spite of this, Samruk-Kazyna, the sovereign wealth fund in charge of managing state assets, said that KMG raised almost $330 million through the sale of 18.3 million shares. In the period before the initial public offering, the fund held 90.4% of the KMG shares and the central bank of Kazakhstan 9.6%.
This is the official start of what the government calls its People’s IPO initiative, which was designed to establish a class of retail investors in Kazakhstan.
Since that plan was revealed in 2011, KMG is the only business to execute an IPO. KazTransOil, a corporation that transports oil, and KEGOC, a company that produces electricity, are the other two.
Delays have been brought on by a number of circumstances, including the pandemic, numerous local and international economic crises, and pushback from special interests wary of the scrutiny that public ownership brings.
Last year, President Kassym-Jomart Tokayev advocated for the reintroduction of the People’s IPO as a way for all citizens to have the opportunity to partake in national riches.
Prime Minister Alikhan Smailov stated earlier this month that the People’s IPO initiative would increase corporate accountability and transparency and is a step toward creating an open and effective economy in the best interests of the people of Kazakhstan.
In order to avoid the concentration of huge blocks of shares in a few significant investors, Samruk-Kazyna rejected several offers for KMG shares in light of this.
It accepted bids totaling $326 million out of the 129,900 proposals it received for the $386 million.
The bulk of the bids for the Kazakhstan state-owned oil and gas firm, which came from the nation itself, were given priority.
48.5 percent of the shares went to ordinary Kazakhstani persons, while 47.2 percent went to Kazakh businesses. Foreign individuals and firms obtained 4.3 percent of the shares.
Almassadam Satkaliyev, the head of Samruk-management Kazyna’s board, praised the IPO for “demonstrating the tremendous potential of Kazakhstan’s securities market, as well as a considerable growth in investing knowledge and engagement among residents of Kazakhstan.”
Other businesses planning for initial public offerings (IPOs) include Samruk Energy, a power production company, Kazakhstan Temir Zholy (KTZ), a railway operator, Air Astana (whose intentions to list this year have changed), and KazPost, a post office.
Prior to the end of the year, neighboring Uzbekistan also succeeded in launching its IPO program. UzAuto Motors, an automaker, issued its initial public offering (IPO) on December 1 despite ambitious intentions to delay the flotation of 15 significant enterprises until 2023. December 22 is the deadline for the submission of bids.
