VTB’s $1B SPO Raises Free Float & Cuts State Stake to Just Over 50% at Discount

VTB Bank’s announcement of a major SPO in mid-September 2025 signals a strategic move to fortify its capital base at a time when interest rate pressures, regulatory demands, and declining lending have squeezed profitability. Raising ~84.7 billion roubles (≈US$1.02 billion) by issuing ~1.264 billion shares is substantial in Russia’s equity market context — this is the largest such deal since 2023. Key motivations include satisfying regulatory capital requirements and offsetting damage from credit losses amid high rates.

Pricing at a 7% discount to the maximum book-building price (71.9 roubles vs. 67 roubles) is consistent with industry norms for SPOs to ensure sufficient subscription, especially given the dilution risk; analysts noted that while it is “good for investors”, existing shareholders face adverse valuation effects.

The reduced state stake — to 50% plus one share — while keeping threshold control, increases free float to over 49%, potentially reshaping liquidity and market dynamics. VTB’s application for increased weighting in the MOEX Russia Index reflects anticipation that higher free float will draw institutional flows linked to index composition.

The offer saw strong domestic demand: institutional plus retail interest exceeding 180 billion roubles suggests market depth among Russian investors even under geopolitical and macroeconomic stress. Retail allocation of ~41% also reflects policy or image-concerns in building broader public ownership.

However, the good outcome doesn’t erase risks. Net interest income has fallen sharply (~40-45% year-over-year for recent periods), and margins have been compressed. Even with SPO proceeds, VTB must manage credit risk, regulatory capital, and a likely slowing economy. There’s also reputational risk in heavy dilution and the message sent to investors when state control recedes though not relinquished.