Mail.ru, a Russia-based online media group backed by Naspers’ corporate venturing unit, has raised $912m in its London Stock Exchange flotation after pricing at the top of its range and seeing a 30% jump in its value on the first day of trading.
Mail.ru sold 32.9 million global depositary receipts at $27.70 each for a market capitalization of $5.7bn, and the share price closed at $36 on Friday.
The company had initially expected to raise between $500m and $750 at its initial public offering (IPO) of between 10% and 15% of its shares.
The offering was oversubscribed by a factor of 20 and was the world’s largest internet IPO since the $1.5bn debut of China-based e-commerce company Alibaba in 2007, according to news provider Dow Jones.
After the flotation costs, part of the proceeds of up to $876m from Mail.ru’s IPO will be used to buy 7.5% of Russia’s biggest social-networking website, vKontakte, for $112.5m.
Mail.ru incorporates the investments of former holding company Digital Sky Technologies (DST), which includes two of the three largest Russian language online social networking sites, Odnoklassniki and Moi Mir; the two largest instant messaging networks in Russia, Agent and ICQ (which it recently bought from AOL); an email service; Russia’s second largest internet portal, Mail.ru; and the country’s largest online games platform.
The company has also made corporate venturing investments in Russia and the Ukraine, including buying 25% of social media group vKontakte and 25.1% of online payments processing group Qiwi (formerly OE Investments). Mail.ru also owns small stakes in US social media companies Facebook (2.4%), Zynga Game Network (1.5%) and Groupon (5.1%).
However, Mail.ru’s IPO, which was co-ordinated by investment banks Goldman Sachs and JP Morgan, did not include DST Global, a related company that also holds shares in the US companies.
In July, South Africa-based media conglomerate Naspers used its corporate venturing division to take a direct stake in DST before its integration into Mail.ru.
Naspers already had an indirect holding in DST through its 35% stake in a portfolio company, China-based messaging service Tencent. Tencent bought 10% of DST for $300m in April.