The initial public offering book of the VTB bank has already been three times oversubscribed since the announcement of the price range. However, this strong interest to the deal does not mean that the shares will be floated at the top price.
The IPO book of VTB was covered almost three times after the first few days of the road show, Kommersant sources among coordinators of the offering reported. Deutsche Bank's book was 120 percent oversubscribed at the medium price, according to the source.
State-owned VTB set last week the indicative price range for the public offering between 0.1130 and 1.1390 rubles per share. The bank is issuing new shares to boost its capital base and fund new lending growth.
VTB is to float 22.5 percent of its shares in London and Moscow. Russia's second-largest bank will raise $8.4 billion if pricing of the deal is taken up at the top of the range. The decision on the pricing is due on May 11. Citigroup, Deutsche Bank, Goldman Sachs and Russia's Renaissance Capital are bookrunners for the IPO.
A demand from would-be private shareholders skyrocketed after the bank announced the price range. More than 50,000 private clients in Russia have subscribed to the shares, VTB said late last week.
Stocks are likely to go up right after the floatation due to the unsatisfied demand, analysts say. The outstanding demand may set the pricing at its top. However, the recent floatation of Magnitogorsk Metal and Steel Works has shown that oversubscription does not always mean that shares are floated at their top.