Kaspi.kz IPO Case Help
Introduction
KaspiKz is a well-known technological Corporation in the country of Kazakhstan.Kaspi is a stock company which established in the year 2008. (Çekin, 2019) The headquarters of the company is in Almaty, Kazakhstan. The KaspiKz entered the top 35 information technology companies in 2019. In 2020, the company’s website was recognized as the safest website among the banks of Kazakhstan. In the year 2020, the Kaspi became the top player in the financial market of Kazakhstan. The corporation comprises Kapsi travel LLP, Kapsi Pay LLP, and Kapsi bank JSC. The constituent marketplace of the corporation became the country’s top online transaction platform. KaspiKz innovations increase the efficiency of investments in Kazakhstan. According to financial analysts, the KaspiKz is one of the fastest-growing IT financial companies in Eurasia and Europe.
Transformation Undertook with Kaspikz Investment
In the year 2018, the Founder of the Corporation, lomtadze, and his team transformed their brand and renamed it from Bank to KespiKz. Now the company shifted from the banking sector to Technological Corporation, which directly interacts with its customers with the help of a mobile app known as the App Store. That mobile App was organized on three different platforms Fintech, Marketplace, and overheads. Kaspi. Kz became the champion of Kazakhstan. In 2018 the Founder of the Kespi. Kz announces that in next year we enter in the international markets. The Kespi. Kz will do its first international trading on London Stock Exchange.
The company selected the London market because this is the most emerging stock market globally. In 2019,KespiKz was in the top 5% in net income, Top 1% in revenue growth, and top 10% in the profit margin of listed companies. The KespiKz hires the most experienced and professional advisors from the globe for the initial public offering. The company transforms because of generating more revenue which it succeeds. The market value, brand image, and brand equity of the KespiKz enhance globally. The company attracts the customers through the app store, through its channels, commercial shops, vendors, and from the point of sales.
Advantage to Using a Vanilla Bank to Build the Tech Company
The company has the advantage of low risk by using a vanilla bank because the financial instruments and derivatives of the Vanilla bank havea lower risk. These are straightforward financial instruments like bonds that have the exact maturity period. After the maturity, KespiKz pays the principal and interest amount to the investors or customer. The other advantage of using a vanilla bank is that in this method, the company customers have no right to the corporation; they have no right to the part in any decision making.
But as a Financial Analyst considering the company’s current situation, the Initial public offering is a good option. However, the company increased its value in Kazakhstan and internationally. The shares of the KespiKz are preferred due to their high market value, e-finance, bill and card payments, bill payments, and loyalty in dealing with investors.
Why Go Public?
From the perspective of the Founder of the Corporation, Mangers of KaspiKz, and Equity Investors, the financial analyst answers these questions why is going publicly crucial for the corporation? What are the advantages and downsides when pursuing an IPO?
The offering of shares to the public is essential for the growth and recognition of the KaspiKz. Before the public offering, the company was a small private corporation depending on the Founder, employees, and members of family and angel investors. With the Public Offering, the company’s value increased in the market in Kazakhstan, and the company attracted more investors towards the corporation. As the Founder of KaspiKz in this public offering, the company generates more revenue because the public can buy the shares and own a percentage of the corporation. The Investment bank of Kazakhstan entirely directs this Initial Public offering process. The angel investors of the KespiKz are also satisfied with the public offering because they also want the company to grow and raise capital. The significant advantage of the IPO is raising additional money, which also increases the profit for investors and Employees of the KaspiKz. The company can pay its existing debt or purchase the property or financial assets from this raised capital with the additional money.
Advantages of Public Offering
The advantage of a public offering for the employees is that with the growth of investors and customers, the market value of the corporation increase. With the increasing market value and brand recognition of KespiKz, the employees have the chance to grow their careers in a well-known corporation. With the increased capital, the company also provides good salaries to the employees. Also, it offers those additional rewards and benefits, which increase the commitment and motivation of the employees of KaspiKz.
The advantage of a public offering for the investors is that the investors can get excellent cash profits from the company as dividends with additional capital—the investor’s relationship with the corporation increase in the long run.
The advantages of a public offering for the Founder of KespiKzare that the company’s valueincreases in the industry of information technology. There venue of the corporation also increases with additional capital. With the public offering, the company’s Founder also has the opportunity to increase the investment by investing that capital in expanding the business. Another advantage of a Public Offering, the value of the company increase in Kazakhstan, and the company attracts more investors towards the corporation. With the Initial public offering, the Founder of the KaspiKz can reduce the cost of capital.
Downsides of Public Offering
There are also some disadvantages of the public offering that KaspiKz faces in starting public offering.
Extra Governing Requirements and Revelations
Public corporations are reliable in filing their annual financial statements with the Securities and Exchange Commission. This filing of financial statements in the same year is very costly. The KespiKz goes through a long time-consuming process. The company pays millions of dollars to the audited firm, which evaluates the company’s financial statements. This can be a disadvantage for both the Founder and investors of the company.
Pressure of Market
The market pressure is also a disadvantage for the corporation because this pressure creates challenges for the Founder to decide on the right time and affects the leading role of the Founder. The Founder has the entire focus on the vision and mission statements of the KespiKz, but the change in the stock market and fluctuation in stock prices creates a problem for the company.
Transaction Cost
The Initial Public offering is costly. The corporation invests a lot of money in the transactions of public offerings. The transaction cost includes auditor fees, the cost of registration, the cost of printing, and the legal fees included in the initial public offering transaction.
Potential Loss of Control
The major disadvantage that the Founder faced after the initial public offering was that he lost control of the corporation. Before the IPO, all the decisions related to KespiKz were taken by the Founder, but after the public offering, the founder share this rite of determination with the shareholders of the KespiKz. If the investors feel that the company’s leadership does not make good money for the investors, they can vote for the new leadership of the corporation…..
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