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Capital Markets

Kazakhstan: Property play proves popular investment

UK and continental European investors snapped up shares in Chagala Group, the leading property developer in oil-rich western Kazakhstan, enabling it to raise $120 million through an IPO on the main market in London last month.

Marketed via ING at $7.75 to $9.75 per global depositary receipt, the 12.35 million GDR offering (including the greenshoe overallotment option) was priced at the top of the range, valuing the company at just under $220 million. The shares rose by $1.25 or 13% to $11 on their first day of trading and have traded around that level despite the recent volatility in global equity markets. The IPO effectively doubled the number of outstanding shares and was split roughly 75% between new stock and the sale of secondary shares by seed capital investors who sold around a third of their pre-IPO holdings.

Founded in 1994, Chagala’s property portfolio has grown rapidly and now includes a diverse range of projects including hotels, apartments, offices, restaurants and shopping centres.

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