Kaspi looks beyond London listing to brighter lights of New York

Stay informed with free updates

Simply sign up to the Equities myFT Digest — delivered directly to your inbox.

The boss of $18bn fintech Kaspi said the US was the “natural home” for an ambitious technology company after it became the latest London-listed group to sell shares in New York in search of higher valuations and better liquidity.

Kaspi raised just over $1bn for existing shareholders through an offering on Nasdaq this week, less than three years after it first listed on the London Stock Exchange.

Mikheil Lomtadze, Kaspi chief executive, told the Financial Times that the London listing “was an incredible milestone for us, especially at the beginning of our journey”. But he added that “the US is the market which will give us access to a wider pool of investors and another level of recognition”.

The move will fuel anxiety that London and other European financial centres are falling further behind the US as the preferred venue for large companies.

FTSE 100 gambling group Flutter is set to join Kaspi with a US dual listing later this month, following groups including building supplier CRH and plumbing group Ferguson. Several privately owned European companies including Arm and Birkenstock also picked the US instead of their home markets for initial public offerings last year.

London Stock Exchange chief David Schwimmer recently said it was “a myth” that companies would boost their valuation by moving their listings to the US.

However, Karen Snow, Nasdaq global head of listings, said there were “compelling” arguments for companies to move.

“You’ve got very sophisticated institutional investors here who understand how to value growth,” said Snow. “[Kaspi is] a very interesting company that I would say didn’t feel like it was getting full credit on the LSE, despite their performance.”

Kazakhstan-based Kaspi operates a “super app”, offering a range of services including online shopping, personal lending and filing marriage applications. It has compared itself to Tencent’s WeChat in China, or Nasdaq-listed MercadoLibre, which operates across Latin America.

It reported revenue of $2.8bn in the first nine months of 2023, and net income of $1.3bn.

Kaspi’s London-listed shares have almost tripled since their debut in 2020, but the company has struggled with low trading volumes. One person who worked on the deal said that low liquidity relative to its growing market capitalisation had blocked some would-be investors from buying the stock in London due to fund risk limits.

The company could now be eligible for inclusion in the Nasdaq 100 or Nasdaq Next Generation 100, which would provide a further boost to volumes from passive funds that track the indices.

The company expects to eventually delist from the LSE once the bulk of trading volumes gravitate towards the US, according to two people close to the company. Kaspi also has a listing on the Kazakhstan stock exchange. 

“We see the US as the natural home of the company going forward, looking at its future growth outlook,” Lomtadze said.

Lomtadze and Kaspi chair Vyacheslav Kim each stood to make about $350mn from this week’s share sale and will together hold about half of the company’s stock.