Uzbekistan’s evolution in the international financial system

India’s close partner in Central Asia Uzbekistan completed the largest IPO in the history of its capital market on May 13. The National Investment Fund of Uzbekistan (UzNIF) became the first Uzbek issuer to list its shares simultaneously on the London Stock Exchange and the Republican Stock Exchange “Toshkent.”

On May 18, the fund began unconditional trading on the London Stock Exchange. Trading also commenced on the Tashkent exchange on the same day, giving both international and domestic investors access to a portfolio of Uzbekistan’s state-owned assets.

The placement of UzNIF marked the country’s first international IPO and one of the most significant milestones for the financial system of New Uzbekistan. For the first time, international investors were offered diversified exposure to the country’s state assets through a single market instrument.

The fund holds stakes in 13 major state-owned enterprises in the energy, utilities, telecommunications, banking, and transport sectors. As of the end of 2025, the portfolio’s net asset value was estimated at $2.44 bn. The transport sector accounted for 32.4% of the fund’s assets, followed by energy (19.1%), telecommunications (15.2%), utilities (14.9%), and banking (13.4%).

Against the backdrop of expanding international economic integration, Uzbekistan also strengthened its ties with India. In 2025, trade turnover between Uzbekistan and India increased by 33.3% vs 2024 and exceeded $1.3 bn.

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Investment cooperation showed particularly strong momentum. Indian investment in Uzbekistan’s economy rose by 65% in 2025 to reach $246.7 mln, while the cumulative stock of Indian investment surpassed $586.7 mln. As of early 2026, 375 companies with Indian capital were operating in the country.

Indian investors have been steadily expanding their presence in pharmaceuticals, agribusiness, machinery manufacturing, mining, and infrastructure projects. This surge in investment activity has become one of the clearest indicators that economic relations between Tashkent and New Delhi are evolving toward a deeper and more diversified form of integration.

The fund’s largest assets include Uzbekistan Airways, Uzbektelecom, Uzbekhydroenergo, railway infrastructure, and SQB Bank. The net asset value of Uzbekistan Airways alone was estimated at approximately $403 mln.

A particularly important aspect of the transaction was the involvement of Franklin Templeton as the fund’s trustee and professional asset manager. The Ministry of Economy and Finance engaged Franklin Templeton to manage the fund’s assets, and the management mandate was formally transferred to the company in 2025, according to Jafar Khidirov, Head of Sector at the Center for Economic Research and Reforms, Uzbekistan.

For international markets, Franklin Templeton’s participation served as a strong signal of confidence in the quality of corporate governance, the transparency of the transaction structure, and the fund’s long-term strategy. Marius Dan, Head of Franklin Templeton’s Uzbekistan National Investment Fund, described the IPO as “a historic moment for Uzbekistan’s capital market” and the country’s first fully fledged international equity offering, Khidirov pointed out.

The IPO of the National Investment Fund of Uzbekistan is the culmination of nearly a decade of economic transformation. Since 2017, Uzbekistan has undertaken a far-reaching transition toward a more open and integrated economy. The country liberalized its foreign exchange market, removed restrictions on currency conversion, legalized foreign exchange transactions through the banking system, and eliminated the dual exchange rate regime, according to Khidirov.

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During this period, GDP per capita increased from $1,781 to $3,900, unemployment declined from 10.5% to 4.9%, and real household incomes rose by more than 83%, according to Khidirov.

Trade policy also underwent substantial reform. The average import tariff was reduced from 15.3% to 7%, and zero import duties were introduced for 59 categories of food products. Uzbekistan has now reached the final stage of negotiations to join the World Trade Organization. Against this backdrop, the country’s exports grew 2.7-fold between 2017 and 2025, rising from $12.9 bn to $35.5 bn, according to Khidirov..

Domestic economic reforms were equally significant. State price controls were abolished in several sectors, including grain and cotton, thereby expanding the role of market mechanisms in the economy.

The most visible transformation occurred in investment. Gross fixed capital formation increased from approximately $14 bn in 2017 to $47 bn in 2025. Foreign direct investment rose more than fivefold, from $2.4 bn to $12.5 bn.

The number of free economic zones expanded from 3 to 46. Around 700 industrial zones were established, including 200 youth industrial zones and 500 small industrial zones. By the end of 2025, approximately 2,800 public-private partnership projects with a total value of $29.2 bn were under implementation.

At the same time, Uzbekistan developed an institutional framework to support long-term capital inflows. The country signed 54 double taxation treaties and more than 50 agreements on the protection and promotion of investments.

The combination of structural reforms, macroeconomic stability, domestic market growth, and expanding international investment partnerships has reshaped global investor perceptions of Uzbekistan and laid the foundation for the country’s successful entry into international capital markets.

The IPO raised approximately $603.6 mln, valuing the fund at around $1.95 bn. About 31% of the fund’s equity was sold in the transaction. If the over-allotment option is exercised in full, the total deal size could increase to approximately $691 mln. The UzNIF IPO was more than four times oversubscribed, according to Khidirov.

Only a few years ago, the prospect of an Uzbek issuer entering international capital markets on such a scale appeared unlikely. Today, the UzNIF IPO is widely viewed as a clear indicator of a new stage in Uzbekistan’s integration into the global financial system, according to Khidirov.

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