Russian mobile major Mobile TeleSystems (MTS) is considering an initial public offering (IPO) of its MTS Bank in 2022, the head of the multi-industry investment conglomerate AFK Sistema, Vladimir Evtushenkov, told RBC business portal.
According to Evtushenkov, MTS Bank's IPO valuation could potentially exceed $1bn.
MTS mobile operator is one of the anchor assets of Sistema.
As reported by bne IntelliNews, in the past months Sistema has seen a number of powerful catalysts, such as the sale of its stake in Detsky Mir childrens' goods retailer, the IPO of major e-commerce player Ozon, IPO of Segezha timber major and consolidation of biotech assets.
Evtushenkov also confirmed that Sistema’s three other key non-public portfolio companies – Medsi healthcare clinics, Steppe agriculture holding and Binnopharm Group biotech holding – are ready for an IPO, but that the offerings in the short term were unlikely.
Sova Capital sees a potential IPO for MTS bank as positive for MTS and Sistema, as it could help to crystalise the value of the bank to the market.
The analysts remind that the bank is rapidly expanding in the retail segment, with the retail loan portfolio growing 35% year on year before provisions in 1Q21, while affirming a buy rating on MTS and Sistema's shares.
Increased profitability at MTS Bank has supported the EBITDA of MTS in 1Q21. The operator posted a 5.5% y/y increase in revenues under IFRS to RUB130bn ($1.8bn) in 1Q21, with EBITDA gaining 6.7% y/y to RUB55.4bn, making a 45% margin.
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