The IPO of Air Astana could help lead to the resurgence of London as an attractive destination for fast-growing companies from traditional emerging and frontier markets.

The national carrier of Kazakhstan announced this week that it intends to pursue an initial public offering (IPO) of its GDRs in London, alongside a listing of its shares and GDRs at the Astana International Exchange and Kazakhstan Stock Exchange. Pre-deal investor education is set to start today, Friday 19 January, according to terms seen by this news service.

“If you look at the history of international IPOs, London is where many companies have always gone to,” said IPO consultant Chris Ennals. He cited the example of Kazatomprom [LSE:KAP], the Kazakh state-backed uranium mining giant which was listed in 2018, as a recent example.

In 2007, Kazakhstan’s Eurasian Natural Resources listed in London with a deal value of USD 3bn, according to Dealogic; it delisted in 2013.

The largest EM London IPOs on record are Russia-based Rosneft [MCX:ROSN] and VTB Group – USD 7.9bn and USD 10.6bn respectively, although the war in Ukraine has ended any hopes of further Russian IPOs in London.

Air Astana’s move could bolster EM IPO momentum after a two-year drought in London emerging markets issuance.

History shows that it’s a pipeline worth targeting. After the USD 20bn plus volumes of the early 2000s, the 2010s still produced EM IPO volumes comfortably into the billions.

Numerous EM issuers are turning to London given their domestic markets are still too nascent for large-scale listings; in some cases, investor concerns around governance and geopolitical risks also linger.

Charles Russell Speechlys’ corporate lawyers Andrew Collins and Emily Dobson said several international companies still envision London listings as opposed to other jurisdictions.

For instance, natural resources – oil, gas, and mining –, and infrastructure and aviation businesses from emerging countries will still find a home in London, much more than in the US, they argued.

They say that the UK’s historic track record, language, sector research, and advisory capabilities still make London a suitable listing venue.

Growing pipeline 

Azrieli Group [TASE:AZRG], an Israel-based real estate firm, is considering strategic options for its data centre unit, Green Mountain AS, including a GBP 2.5bn IPO in London, according to a newswire report. A London IPO of Olam Food Ingredients (OFI), a business owned by Singapore-based Olam Group [SGX:VC2], is also still in the parent company’s plans.

But increasingly adviser imagination is targeting energy, infrastructure, and even technology businesses in former Soviet countries and emerging Europe regions as the deal pipe of the future, according to an ECM banker.

Despite the frequent opining on the decline of the LSE, London still has some appeal.