Ticket to London: How Much Uzbekistan Airways Can Raise in IPO

Uzbekistan Airways is preparing to enter the public capital market, planning to place up to 20% of its shares. The anticipated IPO promises to become one of the most landmark events for the region’s financial sector, opening direct access for institutional and retail investors to the flagship asset of the country’s transport industry. Kursiv Uzbekistan discussed with experts how much the company could raise as well as potential industry challenges.

Article contents

• How much the company is worth
• Fundraising volume and investor appetites
• The role of Franklin Templeton and the effect of 115 initiatives
• Deal architecture: Tashkent vs London
• Interest of global giants and aviation sector specifics
• Infrastructure challenge: fleet vs airport
• Looking into the future: final assessments of placement prospects

How much the company is worth

One of the main topics among the investment community has been the question of a fair price benchmark for the company. The spread of expectations of $1.6–2.3 bn discussed in the market looks quite justified considering both the internal audit and the fundamental financial performance of the carrier.

Head of the analytical department at Avesta Investment Group Shodlik Nazarov revealed the calculation details:

«Our base estimate of the market Equity Value of Uzbekistan Airways is about 19.9 trln soums or roughly $1.66 bn. Since the company’s shares are not traded on the Tashkent Stock Exchange and the company itself demonstrates steady financial growth, the valuation was carried out using the Free Cash Flow to Equity (FCFE) method with a two-stage growth model. The first stage considers the company’s current period of accelerated development, and the second assumes a transition to more stable long-term growth rates,» the analyst explained.

Shodlik Nazarov added that based on the results of the first 9 months of 2025, according to national accounting standards, the company’s profit increased by approximately 43%, confirming that Uzbekistan Airways is in a stage of active growth. Avesta Investment Group expects this stage to have a positive impact on the company’s financial performance over the next five years, after which growth rates will gradually stabilise.

Under a conservative scenario, the model assumes a growth in free cash flow to equity (FCFE) of 20% during the first stage and 10% in the long term. The calculation is based on the actual FCFE for 2024. The required return on equity is assumed at 22%, reflecting the company’s capital structure and current market conditions.

«According to the valuation results, the fair value of equity is about 19.9 trln soums ($1.66 bn). Thus, a valuation benchmark in the range of $1.6–2.3 bn generally seems realistic. At the same time, the lower boundary of the range corresponds to our conservative valuation scenario, while reaching the upper boundary is possible with the successful implementation of the company’s transformation programme, further growth in operational efficiency and the maintenance of a favourable environment in the aviation industry,» the expert notes.

Farhod Murodov, Investment Banking Manager at ALKES, confirms this thesis and points to a specific independent «anchor» that formed the basis for the lower boundary of the valuation:

«The $1.6–2.3 bn range should be viewed as a benchmark based on currently available information and existing valuation anchors rather than a rigid limit on the company’s potential value. The lower boundary has a clear independent basis: it reflects the net asset value of the UzNIF stake. The company was valued by a Big Four auditor, and the value of a 25% stake at $403.6 mln implies a valuation of around $1.6 bn for 100% of the capital. For a frontier issuer, such an audited NAV anchor is an important reference point for investors and increases the transparency of the investment story,» the ALKES manager believes.

However, he adds that the final valuation in the IPO will depend on market conditions, financial performance dynamics, transformation progress, disclosure quality and the depth of investor demand. As the development programme is implemented and operational improvements are confirmed, the market may revise its perception of the company’s fair value.

Key financial indicators of JSC Uzbekistan Airways for Q1 2026 compared to Q1 2025 (under NAS)

Source: Single Portal of Corporate Information

Fundraising volume and investor appetites

The planned share placement of 15–20% suggests substantial volumes of capital raising. Analysts call the $300–450 mln corridor ambitious but an absolutely achievable scenario backed by recent large deals in the Uzbekistan market.

Shodlik Nazarov points to a direct correlation between the success of the recent UzNIF listing and the airline’s future placement.

«During the UzNIF IPO, we observed high interest from both international and local investors, demonstrating a growing interest in high-quality Uzbekistan assets. Uzbekistan Airways is one of the key aviation companies in the region and shows high financial growth rates which, in our view, could generate no less and potentially even higher investor interest,» Shodlik Nazarov believes.

According to him, if the placement is carried out under favourable market conditions and at a fair company price, raising $300–450 mln in the IPO seems quite realistic. However, the final placement volume will depend on the definitive company valuation, the size of the offered share package, market conditions at the time of the IPO and overall demand from institutional and retail investors.

Assessing the prospects of building an order book in this price corridor, Farhod Murodov from ALKES cites strong regional market benchmarks as an example.

«When placing 15–20%, such a benchmark is possible given sufficiently favourable market conditions and strong demand from institutional investors. There are grounds for such demand: the UzNIF IPO was oversubscribed several times over, with more than 200 institutional investors participating, holding combined assets of about $1 trln. Regional benchmarks also confirm the potential for such deals: UzNIF raised about $692 mln and Air Astana around $370 mln,» the expert emphasised.

Role of Franklin Templeton and effect of 115 initiatives

As a reminder, UzNIF owns 25% of the airline’s shares. A key trust factor for major international funds is the presence of an experienced global player in the management structure. Franklin Templeton, which manages the Uzbekistan National Investment Fund, is actively introducing the best global corporate governance practices directly into the airline’s structure. A major operational transformation programme has become an important part of this preparation.

Farhod Murodov analyses in detail exactly how investors will evaluate the progress of reforms and associated risks.

«In our view, the upside is realistic. The programme covers key transformation areas – from route network optimisation and operational cost reduction to digitalisation, ERP, corporate governance and improving the efficiency of subsidiaries. With consistent implementation, the stated goal of a $120 mln increase in operating profit looks achievable,» Farhod Murodov is confident.

But the expert warns that investors will typically factor in a moderate discount or more conservative expectations until reforms are backed by actual results. However, Franklin Templeton’s involvement in managing UzNIF is an important trust factor. This boosts investor confidence in the process quality and reduces perceived execution risk.

«The key factor will be a transparent calendar of milestones: IFRS disclosure, ERP launch, strengthened corporate governance, network optimisation and further operational efficiency improvements. As these stages are passed, the discount may gradually narrow and the upside become more apparent to the market,» adds Farhod Murodov.

Representatives of UzNIF itself confirm these intentions, pointing out that asset preparation is conducted according to strict international standards. In response to questions from Kursiv Uzbekistan, the company noted the following:

«As part of the preparation for all IPOs of our portfolio companies, including Uzbekistan Airways (hereinafter – the ‘Company’), UzNIF managed by Franklin Templeton is implementing a structured programme to prepare the Company to enter the capital market. This programme includes the process of selecting the necessary consultants for a successful deal. Consultants, including equity capital advisors, underwriters and law firms, will be selected based on a structured process aimed at attracting the most suitable consortium for each individual transaction. This will take into account industry experience, a successful track record, technical proposals and payment terms.»

Following the successful UzNIF IPO, Franklin Templeton aims to leverage the high standard set by this landmark deal for Uzbekistan to bring a number of portfolio companies to market, including Uzbekistan Airways. The company is focused on implementing more than 100 transformational initiatives recommended by Franklin Templeton which are expected to lead to significant growth in the carrier’s performance.

As proof of the success of such a business model, UzNIF cites a European case:

«In Romania, Franklin Templeton manages Fondul Proprietatea and over the past 15 years has played a key role in developing the capital market as well as preparing large state-owned companies from the fund’s portfolio to enter the market. The latest example is the successful placement of Hidroelectrica, Romania’s largest hydropower producer, whose shares were floated with a valuation of $10.6 bn, while Franklin Templeton as Fund manager sold a 20% stake in the company for more than $2.1 bn,» UzNIF notes.

Deal architecture: Tashkent vs London

The precedent of the dual listing of UzNIF shares clearly demonstrated how local and international capital flows are efficiently distributed. For Uzbekistan Airways, experts forecast a similar configuration where the lion’s share of demand will be met by foreign liquidity while maintaining an important tranche for the domestic market.

According to Shodlik Nazarov, the depth of the local market currently imposes objective constraints on domestic placement volumes:

«In our opinion, the placement structure will depend on the shareholder’s strategy, IPO goals and market conditions at the time of the deal. At the same time, considering the current depth and liquidity of the domestic stock market, it can be expected that the bulk of the placement will be targeted at international investors via GDR issuance on the London Stock Exchange while up to 15% of the placement volume could potentially be offered on the ‘Toshkent’ Republican Stock Exchange.»

Farhod Murodov agrees with his colleague and emphasises that duplicating an already proven scheme significantly reduces the technical risks of the process.

«The UzNIF IPO showed that the dual placement model can work successfully for Uzbek issuers: ordinary shares on the ‘Toshkent’ RSE and GDRs in London. As part of the deal, UzNIF raised about $692 mln with the bulk of demand coming from the international line: around 97% of the volume was placed through GDRs and about 3% through the local tranche in Tashkent,» the expert noted.

According to him, this route also seems logical for Uzbekistan Airways as it has already been trialled and tested on the UzNIF deal. The London line allows attracting international institutional investors through familiar infrastructure while the local placement supports domestic capital market development and expands the investor base in Uzbekistan.

It is expected that UzNIF’s successful experience will increase interest in future large placements in Tashkent, including from foreign investors who have already begun looking more closely at the Uzbekistan market, Farhod Murodov believes.

Interest of global giants and aviation sector specifics

The aviation industry is traditionally considered difficult for long-term investment due to high dependence on kerosene prices, macroeconomic cycles and geopolitical factors. Nevertheless, Uzbekistan’s unique geographical location and booming tourism sector could outweigh these sectoral risks in the eyes of global funds of the calibre of BlackRock or Redwheel.

Shodlik Nazarov believes that regional specifics make the asset an excellent tool for diversifying global portfolios.

«In our view, Uzbekistan Airways possesses characteristics that could make the company attractive to large institutional investors. Key factors include steady financial growth, improved business transparency, ongoing corporate governance enhancements, competent management as well as favourable long-term prospects for the development of Uzbekistan’s economy and tourism industry,» he considers.

The expert emphasises that the aviation industry remains cyclical and sensitive to changes in the macroeconomic environment, fuel costs and geopolitical factors. However, this is precisely why Uzbekistan Airways may be of interest to international institutional investors as an opportunity to diversify their portfolios through exposure to the fast-growing economy and developing aviation market of Central Asia.

Farhod Murodov points out that investors will clearly distinguish between investing in a diversified fund and a specific industry business.

«The asset may appeal to large institutional investors despite the cyclical nature of the aviation industry. Firstly, the channel into Uzbek equities was already successfully opened through the UzNIF IPO: the book was significantly oversubscribed and more than 200 institutional investors participated in the deal. Part of this investor base will likely also consider Uzbekistan Airways, especially given that the company can be positioned as a direct bet on the growth of Uzbekistan’s economy, tourism and passenger air travel,» the ALKES representative is confident.

Farhod Murodov adds that separate interest may be shown by investors specialising in aviation, transport, infrastructure, tourism and adjacent sectors. For them, Uzbekistan Airways could be a straightforward industry asset with growth potential in an emerging market.

At the same time, the expert emphasises that participating in UzNIF and taking part in an individual airline’s IPO are different investment decisions. In the first case, investors entered a diversified portfolio, while in the second they will evaluate a specific business with its industry risks, financial reporting, corporate governance quality and the realism of its transformation programme. Therefore, strong investment history, transparent disclosure and a clear plan for the company’s further development will be key demand drivers.

Infrastructure challenge: fleet vs airport

The rapid growth of tourist flow into the republic poses a serious question for the company: will ground infrastructure keep up with the pace of air fleet expansion? The tight delivery schedule for new aircraft must be strictly coordinated with the construction of the country’s main aviation hub to avoid critical terminal overload.

Farhod Murodov analyses this risk in detail and explains why the current situation plays into the issuer’s hands.

«We consider this risk manageable because both programmes are running in parallel: the state is simultaneously upgrading the fleet – 22 Boeing 787-9s – and building a new Tashkent airport for 20 million passengers costing $2.5 bn, undertaken by a consortium of Vision Invest, Sojitz and Incheon. This is a unified, coordinated aviation hub development programme rather than haphazard growth,» Farhod Murodov emphasises.

The expert notes that today’s constraint is capacity rather than demand. At the same time, Farhod Murodov draws attention to a number of factors: tourism in Uzbekistan is breaking records, GDP is growing at 8.7% (Q1 2026) and before new capacities are introduced the need can be met through leasing and optimising the current fleet and slots.

«A capacity shortage alongside strong demand is rather a ‘good problem’. In the medium term, the new airport (2029–2030) and 787-9 deliveries (from 2031) open the next stage of growth. Moreover, the combination of a modern wide-body fleet and a new airport, given Uzbekistan’s prime location on Europe–Asia routes, creates the foundation for turning Tashkent into a regional aviation hub with transit traffic – this is a separate long-term driver that suits long-term investors well,» the ALKES representative summarises.

Looking into future: final assessments of placement prospects

Given Uzbekistan’s strong macroeconomic indicators and the company’s high level of readiness, experts provide exceptionally positive forecasts for the upcoming listing. Final comments from analysts and fund managers serve as a reliable indicator that the market is ready for the quality absorption of a new major issuer.

Investment banker Farhod Murodov highlights the strength of the current macroeconomic context.

«Overall we assess the prospects positively. The macroeconomic backdrop is a real tailwind. On June 25, 2026 Moody’s upgraded Uzbekistan’s rating to Ba2 with a stable outlook, Fitch holds BB with a ‘positive’ outlook, GDP is growing at 8.7% and inflation is falling towards the Central Bank’s target. This is one of the most compelling stories where growth and reforms combine in the frontier universe,» the expert believes.

The remaining issues – IFRS publication and EBITDA disclosure, a transparent transformation calendar, communication of timelines for the fleet and airport – are corporate in nature and are addressed by standard listing preparation tools. Therefore, the expert sees a realistic path to a landmark placement for the market.

Shodlik Nazarov from Avesta Investment Group also notes the complete readiness of fundamental factors for the launch.

«In my opinion, all the necessary prerequisites for a successful placement are in place. First and foremost, the company demonstrates high financial growth rates and has significant potential to further improve operational efficiency. Additional advantages are transparent and timely financial reporting, a professional management team and the involvement of an experienced international manager,» the analyst noted.

The National Investment Fund itself summarises the long-term goals of the large-scale operational transformation programme which will serve as the final touch in preparing for the public listing.

«The implementation of the operational transformation and IPO preparation programme through the roll-out of 115 initiatives proposed by Franklin Templeton aims to create sustainable long-term company value and improve its efficiency. It is expected to result in greater business transparency, improved operational and financial performance as well as stronger investor relations, including the development of capital market practices,» UzNIF believes.

At the same time, the company stressed that the final parameters of the IPO, including the company valuation, will depend on market conditions, the level of investor demand and the successful implementation of transformation initiatives.