Uzbekistan's sovereign wealth fund plans a dual IPO

Uzbekistan plans to list its sovereign wealth fund, UzNIF, on the stock market. The fund is considering a simultaneous initial public offering in London and Tashkent. This would significantly accelerate the country’s pace of reform in the capital markets.

On April 9, UzNIF announced its intention to place both common shares and global depositary receipts. This would allow the fund to appeal to both international and domestic investors.

A Fund for Privatization

The government established UzNIF as recently as August 2024 via a presidential decree. Since then, the fund has been tasked with driving economic modernization, improving corporate governance, and preparing state-owned holdings for the capital markets.

As of the end of 2025, UzNIF held minority stakes in 13 companies. These are in the aviation, energy, telecommunications, utilities, and banking sectors. The portfolio’s net assets stood at approximately $2.44 billion.

The Uzbek Ministry of Economy and Finance remains the sole owner. Proceeds from the IPO would flow directly to the state. The fund itself would not receive this money.

Focus on Infrastructure and Utilities

The portfolio is heavily concentrated in infrastructure-heavy sectors. The transportation sector accounts for the largest share at 32.4 percent. This is followed by power generation at 19.1 percent, telecommunications at 15.2 percent, utilities at 14.9 percent, and banking at 13.4 percent.

Key holdings include Uzbekistan Airways, Uzbekhydroenergo, Uzbektelecom, the railway infrastructure company, and Sanoatqurilishbank. These are joined by power grid operators, gas suppliers, water utilities, and public transportation companies.

Franklin Templeton is preparing the fund

A local subsidiary of Franklin Templeton manages the fund. The U.S. asset manager oversees approximately $1.74 trillion in assets worldwide. In Uzbekistan, it aims to improve governance, introduce international accounting standards, and prepare selected holdings for an initial public offering (IPO).

Marius Dan, head of Central Asia at Templeton Global Investments, sees UzNIF as a strategic vehicle for the country’s reform agenda. The IPO could, for the first time, open up broader access to the Uzbek economy for international investors. At the same time, it would significantly enhance the local capital market.

London for international investors, Tashkent for the domestic market

If the government gives the green light, UzNIF will split the offering into two parts. A domestic tranche is set to be launched in Tashkent. In parallel, an international offering would target institutional investors abroad.

Jefferies is expected to coordinate the international offering. Abu Dhabi Commercial Bank and Raiffeisen Bank International are also set to participate. Uzbek investment firms are slated to handle the domestic tranche.

The IPO plans are part of a larger privatization program. By 2028, the government aims to take several of the fund’s portfolio companies public. These include the national airline, the electricity grid operator, and the telecommunications provider.

The economic situation supports these plans. Many observers expect real GDP growth of around 7.7 percent for 2025. This development is driven primarily by domestic demand, higher investment, and the market-oriented reforms implemented since 2017.

By 2030, the government aims to increase economic output to more than $200 billion. UzNIF is expected to play a key role in this effort.

Dividends and opportunities for investors

The fund aims to actively increase the value of its portfolio. To this end, it is focusing on management improvements and targeted IPOs. At the same time, it is aiming for a dividend payout ratio of at least 50 percent across all holdings by 2030.

The first dividends could be paid out starting in 2027. This remains contingent on the portfolio companies operating profitably.

The offering could also include an over-allotment option of up to 15 percent of the GDRs. This option is intended to stabilize trading following the IPO. Specific details regarding price and timing are not yet available. The fund plans to publish these details later in a prospectus.

For retail investors, the subscription window is likely to be rather short. Anyone wishing to participate should therefore prepare early and open a securities account in a timely manner.