How Uzbek Companies Can Prepare for an IPO in London

No company from Uzbekistan has yet launched an IPO on the London Stock Exchange (LSE), but international investor interest in the country continues to grow. Ayuna Nechaeva, Head of Primary Markets for Europe at the LSE, shares insights on how best to prepare for a public offering, whether issuing Eurobonds beforehand is necessary, and what may hinder access to global capital.

Eurobonds as a First Step

In practice, many Uzbek companies have started their journey towards international capital markets by issuing Eurobonds. This stems from the need to attract external funding for business projects or to scale operations. Eurobonds become an attractive tool when companies seek capital.

The key lies in meeting the expectations of international investors. They will scrutinise corporate governance and financial reporting prepared under international standards. Companies must be ready to provide such reporting on a regular basis following the bond listing.

This process serves as a kind of a «test drive» in the international capital markets. It allows companies to test their capabilities without assuming the full burden of responsibilities typically associated with an IPO. We’ve already seen Uzbek companies and the Ministry of Finance raise substantial funds through international debt capital markets.

This has helped increase awareness of the Uzbek market among foreign investors. After Uzbekistan’s first sovereign bond issue in 2019, the international financial community started paying close attention to the country. By participating in these transactions, investors were able to assess the quality of local companies, risk levels, and market reliability. Successful Eurobond issuance from a region like Uzbekistan helps create a track record and enables investors to gain a better understanding of the country’s opportunity.

That said, issuing bonds prior to an IPO is not a mandatory step. Some companies may not require additional debt capital at all. They may already have high levels of borrowing from multilateral lenders or banks, or their strategy may be to avoid high leverage, especially in foreign currencies.

In such cases, a company may choose to sidestep Eurobond issuance andproceed directly to IPO preparations.

Which Companies Can Go Public in London?

Two main aspects require attention when planning an IPO. The first is regulatory compliance with LSE requirements. The second is what we call «intangible value» – what makes a company attractive to investors. Even if all formal requirements are met, a lack of investor interest may still derail an IPO.

Key factors to consider when planning to go public include:

• Three years of IFRS-compliant financial statements
• Presence of independent directors on the company’s board
• Well-established risk and operational management processes
• Offering at least 10% of the company’s capital to investors as a minimum free-float
• Use of Global Depositary Receipts (GDRs) if registered in Uzbekistan, since LSE only trades securities in GBP, USD or EUR
• Biannual disclosure of financial results (half-year and full-year reports)

What Makes a Company Attractive to Investors?

The LSE operates two key markets: the Main Market for larger companies and the Alternative Investment Market (AIM) for SMEs and high-growth ventures. Size alone does not define investor appeal. What matters is profitability, growth potential, and ideally, increasing share value along with dividends.

Some AIM-listed companies may not yet be profitable. For example, exploration firms in the mining sector or fast-growing fintech companies may have strong revenues but lack net profit, as they reinvest in expansion. That is sometimes acceptable depending on the industry.

However,  companies in sectors such as Consumer with weak profit margins may raise concerns among investors.

Frontier markets like Uzbekistan naturally carry higher risk than more mature economies like Germany. Investors seek to balance that risk, and in some cases, companies may list at a discount. However, any discount or indeed a premium is not a given and depends on each company’s unique equity story.

What is a discount?

A pricediscount applies when perceived risks are higher for a prospective IPO issuer compared to its listed peer group. Investors compare a company to similar listed peers across global markets, assess valuation multiples, and set a fair price. If a company stands out positively, a discount may not apply.

From experience, companies from markets new to IPOs – especially in developing or frontier economies with political, economic or sector-specific challenges – are more likely to face a so-called risk discount

Key Steps to Going Public

Once a company decides to pursue an IPO, it usually follows a roadmap. Here’s a breakdown of the typical process:

1. Set a timeline.
Decide whether the IPO will take place in one, two or more years. This will determine the pace of preparation.

2. Appoint advisors.
A company does not undertake an IPO alone. It should build a strong team that includes:

• Investment banks, which lead the offering and investor engagement
• A legal firm, to draft the prospectus and manage  communication with the regulator and the Exchange
• Auditors, to review financials (if an issuer does not yet have IFRS accounts, additional time will be needed)

Once this team is in place and the IPO kick off formally, the listing process typically takes 3–6 months. For instance, if a shareholder targets a listing within 12 months, the first few months will focus on choosing and onboarding the deal team before starting intensive preparation.

When Is the Best Time to Launch an IPO?

There are commonly known IPO «windows» based on financial reporting cycles:

• Spring window (March-April) – based on full-year financials
• Summer window – brief period after Q1 results
• Autumn window (October–November) – based on half-year results

Spring and autumn are the most active periods.

How Much Does an IPO Cost?

This is one of the most frequent questions. Costs vary depending on deal size, listing venue, company structure, and more.

There are two categories of expenses:

• Underwriting fees – a percentage of raised capital, deducted from IPO proceeds
• Issuer costs – legal, audit, regulatory, and listing fees

All fees for the London Stock Exchange are publicly available on its official website and depend on the market (AIM or Main Market) and issuer’s market capitalisation.

What Are the Expectations for Uzbek Companies?

The LSE typically does not disclose which companies plan to list. However, I can say this: we are working closely with Uzbekistan and treat this relationship as a priority.

We have carefully studied the recent presidential decree and the list of companies identified as potential IPO candidates. We are actively engaging with them.

Additionally, Franklin Templeton has publicly announced its entry into the Uzbek market by setting up the National Investment Fund of Uzbekistan. While it is too early to say what steps will be taken next, having such a seasoned investor involved in the Uzbek market is a highly positive signal.

Overall, expectations for the Uzbek market are high. Recent successful Eurobond placements by both the government and corporate issuers have improved the country’s image among global investors. We are pleased to support deeper ties between Uzbek businesses and the British financial community.

I believe that when Uzbek companies begin to go public, they will be met with genuine interest in London.