Tinkova's TCS Group rose to $3.8 billion after the start of placement in London

TCS Group, which unites Tinkoff Bank and Tinkoff Insurance, has opened the order book for a secondary placement on the London Stock Exchange. As part of the SPO, the company will sell 10% of its shares, according to a message on the website of the London Stock Exchange. Forbes sources say that the price of GDR during the placement reached $18, which means that the company was valued at $3.6 billion. On the London Stock Exchange, by 19:00 Moscow time, TCS Group papers were trading at $19, which corresponds to an estimate of $3.8 billion.

Details

• TCS Group first announced the offering on June 4th. The additional issue is needed to fulfill the new, increased forecast for the growth of the loan portfolio in 2019: the bank raised it from “more than 40%” to “at least 60%”. The group expected to raise up to $300 million in new capital during the SPO.
• In the afternoon, a Prime agency source in financial circles said that the placement will take place at a price not lower than $17.8 per GDR. Later, Forbes sources said that the price of TCS Group securities during the SPO reached $18 - this corresponds to the company's valuation of $3.6 billion . ). The book of applications has been re-signed several times, Forbes interlocutors said.
• During the IPO in 2013, investors valued TCS Group at $3.2 billion. At the historical peak in March 2014, the group's shares rose to $24, and at the bottom, in the fall of 2015, they fell below $2 per share.
• 47.3% of the company belongs to Oleg Tinkov, TCS Group management - 5.6%, free float - 47.1%, according to the bank's website.
• The shares of existing shareholders may be diluted by about 10%, said Elena Tsareva, an analyst at BCS Global Markets. The bank said in a statement that there are no pre-emptive rights to buy shares, but TCS Group will "make reasonable efforts" to support existing investors.

Why does Tinkov need money? The additional issue should ensure the implementation of a new ambitious annual plan: to increase the loan portfolio of Tinkoff Bank by at least 60%. According to the results of the first quarter of 2019, it grew by 21.5%, to 241 billion rubles. More than half of this growth was provided by a new line of loans, the words of the bank's CEO Oliver Hughes are quoted on the LSE website. It includes POS loans, cash loans, as well as loans secured by an apartment and a car. Many of the loans were made to existing bank customers, Hughes said.

• The bank also stakes on such loans within the framework of an ambitious updated forecast. The amounts of such loans are many times greater than those of card loans, with which the bank started. The average amount of loans secured by real estate is about a million, and the average issuance of credit cards is half that, says Tsareva from BCS Global Markets.
• Nevertheless, the plans of Tinkoff Bank may be hindered by the Central Bank. The regulator is unhappy with the boom in unsecured consumer loans – only in the first quarter of 2019 they were issued by 25% more than in the corresponding period of 2018 – and may try to cool the market by increasing risk ratios. There have already been such precedents: in April 2018, the Central Bank increased the premiums on risk ratios for consumer loans at a rate of 10–30% by 30 p.p.
• In April 2019, TCS Group revised its dividend policy for the first time since 2017: it was decided to allocate up to 30% of net profit for dividend payments (previously up to 50%). The bank also explained this decision, among other things, by the need to increase its loan portfolio. In total for 2018, TCS Group paid out $1.07 per share.