Hong Kong most likely for IPO listing of Dubai’s Telegram

Albert Gea/Reuters

• Dubai’s messenger app to list
• Western markets pose challenge
• UAE unlikely according to expert

Telegram, the Dubai-based messaging app known for its encryption features and large group chats, is most likely to target Hong Kong for its potential listing, experts have said.

This preference stems from the challenges its founder, Pavel Durov, might face in Western markets due to his Russian nationality.

Durov said in a Financial Times interview that a potential IPO is a way to “democratise access” to Telegram’s assets.

He revealed the app is nearing profitability, boasting 900 million monthly active users, which adds up to nearly half of WhatsApp’s 1.9 billion user base.

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“The grapevine has been full of rumours about an equity anchor placement for Telegram in Hong Kong and this could probably be the venue for an IPO,” Matein Khalid, chief investment officer in the private office of Abdulla Saeed Al Naboodah, told AGBI.

Despite the Hang Seng’s poor performance, as a result of economic turbulence in China and reduced Western portfolio flows, Khalid noted that neither London nor New York would likely accept Telegram due to the reputational risks associated with alleged Kremlin connections and terrorist propaganda.

He also doubted a UAE listing for Telegram, given the geopolitical sensitivities and recent removal from the Financial Action Task Force’s grey list.

The UAE has remained neutral in the Russia-Ukraine war. The Biden administration in the US has criticised the Gulf state’s continued open dialogue and business links with Moscow.

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Durov was contacted by AGBI for comment.

Reports have identified Telegram, which is known for its lax moderation, as a “hub” for cybercrime activities including selling and leaking stolen data, organising cybercrime gangs, distributing hacking tutorials and selling illegal physical products such as counterfeits and drugs.

Kela, a cybercrime intelligence firm, noted that while many messaging apps are used for illicit purposes, Telegram stands out for its popularity among cybercriminals.

“Whether Telegram chooses to enhance transparency, distance itself from the Russian government, or explore alternative exchanges, its ability to navigate regulatory challenges will be crucial,” Vijay Valecha, chief investment officer at Century Financial, said.

Despite facing scrutiny over supposed ties to Russia, Durov has dismissed such allegations as baseless, drawing on his history and departure from Russia as evidence of his independence.

“I think for anyone who followed my story, my experiences, the series of events that made me leave Russia more than 10 years ago, it’s pretty obvious that such theories are not credible,” Durov told the Financial Times.

The 39-year-old launched VKontakte in Russia in 2007, but was forced to flee the country in 2014 when he refused to bow to pressure to share data of Ukrainian users on the social media network with the Russian security agency FSB.

This listing consideration comes at a time of increased US scrutiny on social media platforms, including a bill passed by the House of Representatives that could ban TikTok over concerns about Chinese influence.

Meanwhile, Reddit is seeking a valuation of up to $6.4 billion in its upcoming US listing, highlighting the evolving landscape for social media companies amid regulatory challenges.