To be honest, I find it difficult to decide where to begin when reviewing Türker Vangölü Enerji Yatırım A.Ş., because almost every metric I look at brings another striking figure to the table. Calling this an IPO built around a series of records would certainly not be an exaggeration.

First, let us take a look at a few key metrics. I am of the view that no matter how much demand this IPO attracts, there is likely to be enough supply to meet it. Therefore, investors who believe in and trust the company should avoid taking only a superficial look and instead examine the offering in detail. We will only be able to understand the company’s true potential more clearly over time.

The company is going public with a total offering size of 77.5 million shares, including the additional sale. Of this amount, 40 million shares, or 51.61%, consist of shareholder sales, while the remaining 37.5 million shares, or 48.39%, come from a capital increase. This structure indicates that approximately TRY 5 billion in fresh cash will enter the company’s treasury. Ideally, we should have started with the company’s business model, but the financial scale and headline figures are simply too striking to ignore.

Looking at the consortium structure, we see the backing of three state-owned banks. The investment subsidiaries of Halkbank, Ziraat Bank, and VakıfBank—Halk Yatırım, Ziraat Yatırım, and Vakıf Yatırım—are leading the consortium. Including the additional sale, 13.67% of the company will become publicly traded.

A company of this scale has not previously been brought to the public markets in Türkiye. As the largest IPO to date, the total amount that needs to be financed stands at approximately TRY 10.5 billion. How this amount will be absorbed, particularly under the current low-volume market conditions, is one of the key questions surrounding the offering.

Let me state upfront what I would otherwise leave until the end: the IPO discount has been set at 20%. I will return to this point in the valuation section, but it is worth highlighting these unusual aspects from the outset.

Another notable element is the 10-day price stabilization plan. In my personal view, a period of 10 to 15 days is reasonable. What makes this plan particularly interesting, however, is that 70% of the gross IPO proceeds has been allocated for price stabilization.

A review of the prospectus shows that this funding will primarily be sourced from shareholder sale proceeds, with the remaining portion covered by proceeds from the capital increase. Given that shareholder sales account for 51.61% of the total offering, shareholder proceeds alone cannot cover the full amount allocated for stabilization. Therefore, using part of the capital increase proceeds for price stabilization will inevitably reduce the net cash entering the company’s treasury.

While I view the shareholders’ willingness to support the company positively, I do not find it rational to allocate as much as 70% of gross IPO proceeds to price stabilization. If this fund is fully utilized, it would not be surprising to see the effective free float decline to around 7%, or even 6%.

For this reason, valuation models and other calculations should take into account that the net proceeds ultimately reaching the company will be lower than the gross amount raised through the capital increase, and that the planned use-of-proceeds allocations will shift proportionally as a result.

Operational Structure and Subsidiaries

Looking at the company’s business model, we see a holding structure in which operations are carried out through three main subsidiaries: VEDAŞ, VEPSAŞ, and LİNA.

VEDAŞ (Vangölü Elektrik Dağıtım A.Ş.)

VEDAŞ holds an electricity distribution license valid until 2043 across the provinces of Van, Hakkari, Bitlis, and Muş, and is responsible for electricity distribution operations throughout this region.

VEPSAŞ (Türkerler Vangölü Elektrik Perakende Satış A.Ş.)

VEPSAŞ carries out retail electricity sales within the same region.

LİNA (Destek ve Bakım Hizmetleri A.Ş.)

LİNA provides support and maintenance services to the group. It is responsible for fault response, repair, and maintenance processes across the electricity distribution network, primarily for VEDAŞ and VEPSAŞ.

While similar activities are generally consolidated under a single entity at other electricity distribution companies, the structure here has been divided among three separate subsidiaries.

Ownership Structure

Examining the ownership structure, we see that Türkerler İnşaat is currently the sole shareholder, holding a 100% stake. Although Türkerler İnşaat itself has multiple shareholders, controlling ownership belongs to the Türker family, predominantly Kazım Türker. He is also the person who founded the business and developed it to its current scale.

There is a Matryoshka-like ownership structure here: Kazım Türker owns Türkerler İnşaat; Türkerler İnşaat owns Türker Vangölü Enerji Yatırım, the company being taken public; and Türker Vangölü Enerji Yatırım in turn owns the three principal operating subsidiaries beneath it.

At its core, prior to the IPO, this is effectively a founder-controlled corporate structure in which approximately 98% of the overall group is ultimately owned by Kazım Türker.

Revenue Streams and Revenue Breakdown

The company’s revenue is generated from five main sources, with the following shares in total revenue:

  • Distribution Revenue: 42.9%
  • Retail Electricity Sales Revenue: 23.4%
  • Interest Income from Service Concession Arrangements: 17.5%
  • Investment Expenditure Revenue: 13.1%
  • System Usage Revenue: 3.1%

As expected, distribution revenue represents the largest revenue stream, followed by retail electricity sales. Given the nature of the business, this breakdown is quite normal.

Interest income from service concession arrangements has become a significant revenue item due to the recent high-interest-rate environment, cash-holding requirements, and collateral obligations. However, I expect this line item’s share in total revenue to decline as interest rates fall over time. For this reason, I believe valuation models should assume a lower contribution from this revenue stream going forward.

Investment expenditure revenue can reasonably be expected to increase steadily over time. Given the structural characteristics of the electricity distribution sector, this line item has long-term growth potential.

Another long-term revenue item, system usage revenue, consists of infrastructure usage fees. It works in a similar way to the fees paid by other telecom operators to Türk Telekom for access to network infrastructure. Since its share in total revenue is relatively small, I have not gone into greater detail on this item.

Use of Proceeds

The planned use of IPO proceeds is divided into two main categories.

VEDAŞ Capital Expenditures (60% – 70%)

The funds allocated to the distribution company will be used to meet investment obligations required under Energy Market Regulatory Authority (EMRA/EPDK) regulations. These investments are divided into five subcategories:

  • Grid investments
  • Legally required investments (expropriation, asset transfers, etc.)
  • Grid operating system investments (software, hardware, and metering systems)
  • R&D and project investments
  • Other capital expenditures (fixtures, warehouses, storage facilities, logistics, and land investments)

At least TRY 3 billion must be allocated to these mandatory investments required by EMRA.

Working Capital Requirements (30% – 40%)

The planned distribution of working capital among subsidiaries is as follows:

  • LİNA (Maintenance/Support Services): 18% – 20%
  • VEDAŞ (Electricity Distribution): 12% – 15%
  • VEYAŞ (Parent Company): 0% – 3%
  • VEPSAŞ (Retail Electricity Sales): 0% – 2%

At other companies, a similar use-of-proceeds item might be classified as debt repayment. However, because these funds will be transferred to subsidiaries in this case, it may not be appropriate to classify them directly as debt repayment. Whether the funds ultimately function as actual debt reduction or simply as a working capital buffer will become clearer through a closer examination of the financial statements.

Financial Position and Balance Sheet Analysis

The company is being offered at an implied valuation of TRY 77 billion, following the application of a 20% IPO discount. Financial analysis should therefore be conducted with this valuation scale in mind.

Current Assets and Receivables Structure

Total current assets stand at approximately TRY 12 billion. A substantial portion of this amount consists of receivables. Approximately TRY 5.757 billion is made up of trade receivables from non-related parties, while another TRY 4.3 billion consists of receivables from service concession arrangements. In other words, roughly TRY 10.1 billion of the company’s current assets is concentrated in these two major receivable categories alone.

  • Cash and Cash Equivalents: The company holds approximately TRY 228 million in cash, which is relatively low compared with its overall scale.
  • Trade Receivables: Trade receivables from non-related parties stand at approximately TRY 5.757 billion.
  • Receivables from Service Concession Arrangements: Approximately TRY 4.3 billion is classified under current assets and is expected to be collected within one year.
  • Inventories: Inventory levels have declined from approximately TRY 1.3 billion to TRY 865 million over time.
  • Related-Party Receivables: These stand at approximately TRY 250 million.

The company’s receivable and payable turnover periods generally range between 1 and 30 days. Trade payables stand at approximately TRY 2.4 billion, while total payables, including other payables, amount to around TRY 4.4 billion. The broadly balanced maturity profile of receivables and payables, at around 30 days, points to a relatively sound working capital management structure.

Receivables from service concession arrangements arise from the specific structure of the electricity distribution sector. Under its distribution rights, which remain valid until 2043, the company reports all infrastructure investments to TEDAŞ, and these investment amounts are reimbursed to the company over a 10-year period on a real-return basis.

Approximately TRY 4.3 billion of these receivables is classified under current assets and represents the amount expected to be collected within one year. A further TRY 9.5–9.6 billion is classified under non-current assets and represents longer-term receivables. Combined, short- and long-term receivables from service concession arrangements therefore amount to approximately TRY 13.8–13.9 billion.

Non-Current Assets and Other Items

Total non-current assets stand at approximately TRY 18 billion. Property, plant, and equipment account for a relatively small share of this amount. More than half of non-current assets consists of long-term receivables from service concession arrangements, amounting to approximately TRY 9.5–9.6 billion.

The most negative item on the non-current asset side is other receivables. Of the TRY 3.3 billion in related-party receivables, approximately TRY 2.8 billion consists of amounts owed by the parent company, Türkerler İnşaat.

These amounts owed by related parties have increased over time. Whether any portion of the IPO proceeds will ultimately be used to settle this balance remains unclear, and I consider this a negative factor in my assessment.

On the positive side, deferred tax assets stand out. Although this is an accounting item, it reduces future tax-related cash outflows and therefore indirectly supports the company’s cash flow.

In summary, the company’s receivables from service concession arrangements total approximately TRY 13.8–13.9 billion. Of this amount, roughly TRY 4.3 billion is classified under current assets and TRY 9.5–9.6 billion under non-current assets. The company’s total asset base stands at approximately TRY 30 billion.

Debt Structure and Repayment Schedule

Short-term liabilities stand at approximately TRY 7 billion:

  • Short-Term Portion of Bank Loans: TRY 1.9 billion
  • Trade Payables: TRY 2.4 billion
  • Other Payables: TRY 1.9 billion (customer security deposits and deposits)

The TRY 1.9 billion classified under other payables primarily consists of security deposits collected from subscribers. These amounts are adjusted in line with CPI and, while recorded as liabilities, do not create the same immediate repayment pressure as conventional financial debt.

Although the company’s current cash balance is insufficient on its own to cover short-term bank loans, the rapid collection cycle of trade receivables suggests that these liabilities remain manageable.

Long-term liabilities stand at approximately TRY 7.5 billion, of which TRY 6.9 billion consists of bank loans.

The repayment schedule of the company’s bank loans as of the March 31, 2026 balance sheet is as follows:

Maturity Period → Within 1 Year | 1–2 Years | 2–3 Years | 3–4 Years | 4–5 Years | 5 Years and Above | Total

Loan Amount (Thousand TRY) → 1,930,411 | 1,245,015 | 1,260,640 | 960,640 | 950,346 | 2,486,654 | 8,833,706

The company’s total bank debt of approximately TRY 8.8 billion is relatively evenly distributed across different maturity periods and appears manageable within the current operating structure.

Profit Margins

The historical trend in the company’s profit margins is as follows:

Margin Type → 2023 | 2024 | 2025 | 31.03.2025 (3 Months) | 31.03.2026 (3 Months)

Gross Profit Margin → 35.1% | 40.2% | 35.6% | 22.7% | 42.8%

Operating Profit Margin → 32.9% | 40.8% | 37.1% | 30.4% | 42.6%

Net Profit Margin → 22.8% | 17.5% | 11.2% | 24.5% | 0.6%

Gross profit and operating profit margins remain at very strong levels. The widening gap between operating profit and net profit is primarily driven by financing expenses and the net monetary gain/loss item.

If interest rates and inflation decline, lower financing expenses could have a positive impact on net profitability.

Overall Assessment and Conclusion

Türker Vangölü Enerji Yatırım A.Ş. is carrying out an exceptionally large IPO in terms of scale. However, based on both current figures and forward-looking projections, I believe the company’s valuation is high.

Based on current market multiples, I believe the company should have been offered at a price at least 40% lower. Even when factoring in expectations for lower interest rates, I still estimate that a forward-looking discount of around 30% would be more appropriate.

The fact that the company operates primarily in Eastern Anatolia, where economic growth potential is more limited compared with the Marmara and Central Anatolia regions, also makes it more difficult to achieve real growth above inflation.

In conclusion, despite having a business model capable of generating regular cash flow, Türker Vangölü Enerji Yatırım A.Ş. presents an IPO profile that warrants a cautious approach due to its current valuation level and regional growth constraints.

Going forward, I believe the net monetary gain/loss item and any new investment agreements should be monitored particularly closely.

LEGAL DISCLAIMER: This content does not constitute investment advisory services. Investment advisory is a personalized service provided based on an individual’s risk-return profile, financial standing, and investment objectives. The information, commentary, and assessments provided herein are prepared solely for general informational purposes and should not be construed as investment recommendations or guidance. This content may not align with the reader’s financial position or risk-return preferences; therefore, investing based solely on this information may not yield the expected outcomes.