Veon's Subsidiary Kyivstar Eyes Nasdaq Listing

In one of the most exciting upcoming deals of the year, Kyivstar, Ukraine’s largest telecom and digital operator, is set to go public in Q3 2025 with a listing on Nasdaq. This would make Kyivstar the first Ukrainian company to be listed on a major stock exchange in the U.S. The listing would value the company at approximately $2.0 billion in enterprise value (with a trailing 12-month, or TTM, EV/EBITDA multiple of ~3.7x), offering global investors a rare opportunity to invest early in a frontier asset with market leadership and strong fundamentals in its core telecom business, and a growing portfolio of fast-growing digital-first companies.

Nasdaq Debut via SPAC: Kyivstar’s public listing is set to occur via a business combination with a special purpose acquisition company (SPAC), Cohen Circle Acquisition Corp I (Nasdaq: CCIR), which is backed by prominent dealmaker Betsy Cohen. Kyivstar is currently a 100%-owned subsidiary of Dubai-based VEON Ltd. (Nasdaq: VEON), which would own approximately 87% post the transaction (actual percentage may vary based on SPAC redemptions and other factors), while public shareholders would own 11%, and the sponsors would own 2%. The pro forma enterprise value (EV) assigned to Kyivstar is ~$2.1 billion, which implies a very reasonable EV/EBITDA multiple of 3.7x, offering investor a highly attractive entry point.

The proposed separation of Kyivstar as a separate publicly-traded company makes tremendous sense, as it will enable Kyivstar to focus on its own growth opportunities and tap into global capital markets by attracting investors who are specifically excited about an eventual recovery of Ukraine. For parent company VEON, shareholders will benefit from placing a distinct valuation marker on its second largest asset, while continuing to participate in any potential re-rating of Kyivstar.

Kyivstar: Market Leadership in an Essential Industry

Kyivstar is Ukraine’s largest telecom provider, serving around 23 million mobile subscribers and 1.1 million broadband subscribers. The company commands ~47% of the nation’s mobile market and ~14% of the country’s fixed broadband market, making it the #1 operator in both segments.

Telecom services are a basic necessity, and Kyivstar’s networks have shown great resilience during times of extreme adversity. In fact, the company invested about $45 million in 2024 to enhance its infrastructure and protect its network amid wartime conditions. The essential nature of its business has helped Kyivstar retain subscribers and traffic despite the conflict with Russia.

Beyond its core connectivity services, Kyivstar has strategically expanded into digital products and services to drive growth and diversify revenue. The Company has built a strong digital ecosystem anchored by Kyivstar TV, Helsi, and Uklon.

Kyivstar TV: is one of Ukraine’s leading digital TV platforms with 2 million registered users. Kyivstar TV offers subscription-based Video on Demand (VOD), transaction-based VOD, free ad supported television (FAST), live broadcasts, and educational content.

Helsi: is Ukraine’s largest digital health provider with 29 million registered patients. Acquired in 2022, Helsi offers e-health services, such as online appointment and medical analysis with 1,600+ public and private institutions integrated into its SaaS platform.

Uklon: is a ride-hailing and delivery service that operates in 27 cities across Ukraine. Acquired in April 2025, Uklon has over 100,000 registered drivers on the platform and facilitated over 100 million rides and more than three million deliveries in 2024.

By bundling services (OTT, e-health, and ride-hailing), Kyivstar increases customer engagement and ARPU while strengthening user loyalty. In other words, a Kyivstar mobile subscriber might also watch TV, book doctor visits, and hail rides all through the company’s ecosystem – making them far less likely to churn to a competitor.

Kyivstar’s focus on bundling services is paying off and is reinforced by rising demand for its services despite the ongoing war with Russia. The number of customers using multiple services (e.g. mobile voice, data, plus at least one digital app) has nearly tripled from 2.1 million in 2020 to 6.1 million in 2024. This increase in multiplay users has driven up ARPU from about US$2.80 in 2020 to US$3.40 in Q1 2025. The growth in ARPU and subscribers, even during the Russian conflict, highlights the resilience of Kyivstar’s business.

Strong Financials: High Margins and Solid Cash Generation

Kyivstar’s long track record of revenue growth and industry-leading profitability makes it one of the most attractive telecom operators in emerging markets. Kyivstar has consistently reported an EBITDA margin of over 50% over the past several years, most recently 59% in 2023 and 56% in 2024. Even for Q1 2025, the company delivered an EBITDA margin of 55%, reinforcing the resilience of the business model despite the ongoing war. This level of profitability underscores the company’s superior operating leverage and disciplined cost management.

Importantly, strong profits have not come at the expense of growth. In Q1 2025, Kyivstar delivered a 37% year-over-year increase in revenue (USD terms), while adjusted EBITDA grew 50%. This growth was fueled by higher subscriber activity and ARPU expansion. During the quarter, ARPU rose 41% year-over-year, driven by a 42% year-over-year increase in multiplay users. Overall, net profit margin during the quarter was 17%, demonstrating efficient conversion of top-line growth into bottom-line returns.

Kyivstar’s high EBITDA margins support a robust free cash flow generation profile, despite elevated level of capex (at nearly 25% of revenue) during the TTM ending Q1 2025. FCF, measured as EBITDA minus Capex, was US$315 million for the TTM ending Q125, demonstrating the strong underlying cash conversion in the business. This ample free cash flow gives Kyivstar the flexibility to keep improving its infrastructure and expanding services without stretching its balance sheet. These cash flows also provide strategic optionality to Kyivstar, including opportunistic M&A (e.g. Uklon, which was acquired in April 2025), maintaining dividends, and reducing debt.

The combination of topline growth, high margins, strong cash generation, and modest debt positions Kyivstar to navigate Ukraine’s challenging geopolitical environment and still invest for future growth.

ARPU Expansion: A Structural Lever for Long-Term Growth

Kyivstar views ARPU expansion as a key pillar of its long-term growth strategy. Ukraine remains significantly underpenetrated (at monthly mobile ARPU of $3.00 as of FY 2024), compared to peer markets in Central and Eastern Europe, where ARPU averages $10.70. This represents a more than 3x monetization gap that Kyivstar is well-positioned to close over time.

Despite the ongoing Russian conflict, the macroeconomic backdrop supports this trajectory. Following a sharp contraction in 2022, Ukraine’s GDP has stabilized and is forecast to grow between 2% and 6% annually through 2027, according to IMF projections. As macro conditions improve, Kyivstar intends to capitalize by introducing premium services and upselling existing offerings.

Kyivstar’s ARPU outlook is further strengthened by expanding its digital services portfolio, which typically generates higher revenue per user than the traditional telecom services. A customer who subscribes to bundled offerings will likely generate far more monthly revenue than a basic voice-only user. As digital services gain traction, they provide a structural tailwind for ARPU growth alongside the macro improvements.

Valuation: Cheap by Any Measure

Despite its industry leading position and resilient financial performance throughout the conflict with Russia, Kyivstar’s pro forma valuation is low. The SPAC deal values Kyivstar at roughly $2.1 billion enterprise value, or ~3.7x its trailing 12-month EBITDA of $562 million. For context, telecom operators in similar emerging markets often trade around 6-7x EBITDA. Thus, Kyivstar is poised to list at nearly 50% discount to its peers, which seems unreasonable given Kyivstar’s market leading position, consistently high margin profile, strong free cash flow generation, and relatively low financial leverage. Using a conservative multiple of 5x would imply an enterprise value of $2.8 billion, which represents an upside of 33% from the current pro forma enterprise valuation of $2.1 billion.

Moreover, any future peace or de-escalation in Ukraine could act as a powerful catalyst for Kyivstar’s valuation. If and when the war subsides over the coming years, the stock could see a significant positive re-rating and converge to emerging market valuation norms (6-7x), leading to a much higher stock price. Overall, the pro forma valuation is a compelling bargain provided one is comfortable with the risk profile.

For VEON shareholders, VEON’s assumed 87% retained stake in Kyivstar implies the parent will hold a $1.83 billion stake in Kyivstar following its IPO at a presumed IPO valuation of $2.1 billion enterprise value. Subtracting this from VEON’s current $6.2 billion enterprise value leaves a “stub” enterprise valuation of VEON of ~$4.4 billion from its remaining operations in Pakistan, Kazakhstan, Bangladesh, and Uzbekistan, which collectively generated TTM EBITDA of $1.13 billion (including all overhead allocation). This imputes a 3.9x EV/EBITDA multiple on the stub VEON operations and assets, which compares favorably to the valuation of the peer group of emerging markets telco providers that carry a 6-7x TTM EV/EBITDA multiple. If Kyivstar were to re-rate higher and command even a 5x EV/EBITDA multiple and trade at $2.8 billion enterprise value and all else remain constant, the stub value of VEON’s operations would have an enterprise value of $3.8 billion, representing a 3.4x EV/EBITDA valuation and a near 50% discount to the average of its peer group.

Peer Group Comparison – Trailing 12-month EV/EBITDA multiple

Risks

Geopolitical risk: The ongoing Russia-Ukraine war remains the single biggest risk. Any infrastructure damage to its network would hamper its operations.

FX risk: Investors are exposed to foreign currency risk. Revenue is in local currency (UAH) and, as such, dollar investors face UAH depreciation risk.

Conclusion

Kyivstar’s proposed public listing in the U.S. through a SPAC merger offers an attractive opportunity for investors to participate in a high-quality digital operator with market leadership in its core mobile and broadband business, high margins and strong cash generation, and exposure to fast growing digital services. The current proposed valuation leaves ample margin of safety for investors willing to look past the current geopolitical tensions and take a long-term view. Any progress towards peace would likely re-rate the stock, and Kyivstar may even attract a scarcity premium given that it would be the only pure-play Ukrainian listed company in the U.S.