The price range of $10.50-$13.00 per global depository receipt for next month's initial public offering (IPO) in London and Almaty indicates a lower value for Kcell than the price TeliaSonera paid for a 49 percent stake earlier this year.
Organisers of the listing, who embarked on a roadshow on Thursday, hope to entice investors with generous dividend payouts and prospective growth in smartphone and broadband use in Kazakhstan, the largest economy in ex-Soviet Central Asia. "There's a lot of room for growth in Kazakhstan before it catches up with markets like Russia," David de Lanoy Meijer, managing director and regional head of telecoms at Credit Suisse, one of the bookrunners for the IPO, said by telephone.
However Stanislav Yudin, analyst with Moscow-based brokerage Aton, said investor appetite might be lacking after MegaFon's IPO this week, even though he viewed Kcell's offer price as relatively cheap for a good asset with little local competition. "After the MegaFon IPO hoovered up cash from the market, any half-a-billion-dollar IPO of a mid-sized company is bound to become more problematic," he said.