Imagine you run a successful bakery in your country. Business is growing and you want to open new locations, hire more staff and invest in modern equipment. But expansion requires significant funding.
Instead of relying entirely on loans, you decide to offer a portion of your business to the public.
People who believe in your bakery can invest and become partial owners. If the business grows, their shares may increase in value and they may receive part of the profits.
This process is called an Initial Public Offering, or IPO.
Uzbekistan is now applying the same principle to some of its largest state-owned enterprises through the People’s IPO programme, giving citizens the opportunity to become shareholders in national companies.
Turning citizens into shareholders
Introduced by presidential decree in 2024, the People’s IPO programme is part of Uzbekistan’s broader economic reforms aimed at reducing direct state involvement in commercial sectors and expanding private participation.
“The strategic objective is to expand public participation in the country’s economic transformation by enabling citizens to become shareholders in major national enterprises,” the Agency for State Assets Management told Euronews.
The initiative is also designed to develop the capital market, attract long-term investment and encourage a culture of share ownership.
Unlike traditional privatisation, where large stakes are sold through private deals, this model prioritises public access and transparency.
Shares are offered openly through the stock exchange, with citizens receiving priority allocation. The state retains a strategic stake while gradually increasing public ownership.
Temur Makhkamov, senior lecturer in finance at Westminster International University in Tashkent, describes the programme as a structural shift.
“IPOs promote transparency, improve corporate governance, and encourage accountability,” he said.
Most importantly, they allow citizens to become stakeholders in national economic development rather than passive observers.”
Strong demand in the first offering
The Uzbek Republican Commodity Exchange (UZEX) became the first company offered under the programme. Shares were priced between 12,900 and 18,000 Uzbek soums or between €0.89 and €1.24.
According to the Agency for State Assets Management, 12,600 applications were submitted and 11,298 were approved. Total investment reached approximately €2.95 million and the offering was oversubscribed.
For brokers, the launch marked a turning point.
“For the stock market, this was a truly important step,” said Farrukh Khodjaev, CEO of investment company KAP DEPO and an underwriter in the offering.
“Before the People’s IPO, the exchange was largely a platform for major banks and institutional investors.”
He noted that the number of shareholders in UZEX increased from around 2,200 to 13,600 following the Secondary Public Offering (SPO).
“We expected strong interest, but the reality exceeded expectations. Oversubscription reached 128%. We saw demand not only from the capital but also from the regions,” he continued.
More importantly, he added, many participants approached the offering thoughtfully.
“People asked questions, studied the company, looked at dividends. That shows a mature approach. It proves there is liquidity and genuine interest in investment.”
Digital access and infrastructure challenges
Digital platforms played a key role in broadening participation. Applications were submitted through electronic trading systems and mobile apps, including GoInvest.
However, rapid retail participation also created pressure on infrastructure.
“When tens of thousands of new investors enter the market simultaneously, the pressure increases on brokers, the exchange, call centres and IT systems,” Khodjaev explained.
Financial literacy was another challenge.
“We had to explain basic concepts: what an IPO is, how returns are formed, what risks exist. Without that, a successful offering is impossible.”
Despite moments of operational stress, he said the system proved capable of handling strong retail demand.
A model seen elsewhere
Public share offerings of state-owned companies have been used in other countries to expand ownership and develop capital markets.
Kazakhstan launched its People’s IPO programme in 2011, offering shares in major national companies such as KazTransOil and KEGOC to retail investors.
Later listings included Kazatomprom and Air Astana, attracting both domestic and international capital.
European countries have followed similar approaches. Poland listed large state-controlled companies such as PGE and PZU on the Warsaw Stock Exchange, encouraging broad participation.
The United Kingdom privatised companies including British Gas and British Telecom through public offerings aimed at citizens.
These programmes helped deepen financial markets and improve transparency while allowing governments to retain strategic control.
A shift in financial culture
The economy has traditionally relied heavily on state financing and bank lending. Expanding the stock market introduces alternative sources of capital and encourages broader participation.
“When citizens become shareholders, they begin to follow company performance, understand risk and return, and think long-term,” Makhkamov said.
“This cultural shift may be just as important as the financial one.”
Khodjaev sees similar changes emerging.
“A layer of retail investors is forming. People are thinking in terms of dividend yield, capitalisation growth and long-term investment. This is probably the most valuable result.”
Still, experts warn that investing carries risks. Share prices fluctuate, dividends are not guaranteed and a long-term perspective is essential. Diversification and financial literacy remain key.
Looking ahead
If the programme continues to develop, IPOs may become a regular instrument for raising capital rather than an exceptional event.
“We have demonstrated that retail demand exists and is significant,” Khodjaev said. “Future IPOs, both state and private, will take place in a more mature environment.”
For now, the People’s IPO signals a gradual shift toward broader public participation in national economic assets, transforming citizens from observers into a more involved role in company growth.
