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VTB Placement Oversubscribed by Two Times
The additional issue of VTB shares, one of Russia's largest banks, has seen high demand, with the book being oversubscribed by two times. This surge in demand can be attributed to a discount to the market price, promising dividends for 2024, and anticipation of record profits in 2026 following a decrease in the central bank's key rate.
The placement price has been set at 67 rubles, with a high probability that it will not fall below that price. By the end of the main session, the price stabilized near the 72.8 ruble mark. More than 14,000 existing shareholders submitted applications for 94.8 million shares, and private investors are reported to make up nearly 50% of the deal.
Four out of five surveyed portfolio managers plan to participate in the VTB placement, showing increased interest due to the proposed discount. Satisfied demand from private investors could reach around 40 billion rubles, marking their largest participation in equity capital market deals in at least the last three years.
The issuer increased the discount to diversify the book and attract market demand. The order book was oversubscribed on the first day, with the price target shifted to 70 rubles. Despite the ban on short selling, the stock price fell to 71.1 rubles in the middle of the day.
The additional issue will be characterized by the presence of several anchor investors, including prominent Russian financial institutions and investment funds, such as major banks and state-related entities. The bank actively promoted the offering, attracting additional brokers on the last day.
However, VTB declined to comment on the subscription results, stating that they will be disclosed on Friday. Mr. Pyanov, the bank's first deputy chairman, previously estimated the bank's net profit at 500 billion rubles for 2025 and 650 billion rubles for 2026. The bank planned to raise 80-90 billion rubles through the additional issue.
The successful placement of VTB shares is a testament to the confidence investors have in the bank's future prospects and the attractiveness of the discounted offering. The exact subscription results will be revealed on Friday, offering further insights into the level of demand for VTB's securities.
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