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Financials

UPDATE 6-Kazakh fintech Kaspi's shares soar in London IPO

* Shares up 26% in London market debut

* Kaspi locks in $6.5 billion valuation

* Investors bet on e-commerce assets as online users surge

* UK’s second biggest IPO of 2020 and Europe’s fourth biggest (Adds share price, quotes, detail)

By Olzhas Auyezov, Pamela Barbaglia and Abhinav Ramnarayan

ALMATY/LONDON, Oct 15 (Reuters) - Kaspi shares soared 26% in London’s second biggest initial public offering of the year on Thursday as the Kazakh banking and fintech firm tapped into pent-up demand for technology and e-commerce platforms.

Kaspi said it had priced its initial public offering (IPO) on the London Stock Exchange at $33.75, the top of its price range, securing an overall valuation of $6.5 billion.

Shares in Kaspi, which controls the third largest bank in Kazakhstan and runs a payments and e-commerce business, opened at $38 and were trading at $42.6 at 1033 GMT.

Kaspi’s IPO ranks as Britain’s second biggest float this year and Europe’s fourth largest, according to Refinitiv data.

“It is a net winner out of the COVID-19 crisis as online ordering has really picked up,” a source familiar with the transaction told Reuters.

Almaty-based Kaspi had ditched previous plans to list in London last year after investors balked at a price which would have valued it at about $5 billion.

But co-founder and Chief Executive Mikhail Lomtadze made a surprise U-turn given soaring demand for technology assets as a result of the COVID-19 crisis which has turned Kaspi into Kazakhstan’s most valued publicly listed business.

With IPO proceeds of nearly $1 billion, Kaspi is also one of Europe’s most lucrative listings this year, ahead of Russia’s state-controlled shipping giant Sovcomflot which made its market debut in Moscow on Oct. 7, but behind coffee maker JDE Peet’s, online retailer The Hut Group and e-commerce group Allegro.

“It’s clearly gone extremely well and validates their decision to cancel the deal last year,” a second source said.

MORE FINTECH IPOs?

The deal may pave the way for other fintech listings in London as a wide range of firms - including from Central and Eastern Europe - seek to capitalise on a surge in online users.

“It shows that London can be a good home for tech and opens the door for similar fintech champions in various emerging market jurisdictions,” the first source said.

Kaspi already traded on the Kazakh Stock Exchange, but the London IPO was its first public offering of shares.

Existing shareholders, including Goldman Sachs and Russian private equity group Baring Vostok Capital Partners, will retain some of their holdings.

With a popular mobile app, which is used by many retailers to sell goods through its marketplace and to accept payments, Kaspi is a household name in the oil-rich Central Asian nation.

Its revenue rose 32% to more than $700 million in the first six months of 2020.

Morgan Stanley and Citigroup acted as joint global coordinators of the London IPO as well as joint bookrunners alongside Renaissance Capital. (Reporting by Olzhas Auyezov in Almaty, Pamela Barbaglia and Abhinav Ramnarayan in London; Editing by Clarence Fernandez, Jason Neely and Alexander Smith and Kirsten Donovan)

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