Keystone initiates Egged IPO, aiming for a valuation of 8 billion shekels; quarterly profit fell by 77%
The infrastructure fund Keystone is initiating the IPO process for Egged, targeting an 8 billion shekel valuation. Meanwhile, the fund reported a 77% decline in net profit for the second quarter of 2026, down to 32 million shekels.
The infrastructure fund Keystone is initiating the IPO process for Egged, and in its quarterly reports, it refers for the first time to the possibility of raising capital for the company.
"Egged is examining moves to change the group's structure and is preparing to execute them for the purpose of raising capital or listing the shares of the company or corporations under its control," the reports stated.
Keystone is aiming for an Egged IPO in the coming year and is targeting a valuation of 8 billion shekels — 2 billion shekels above the post-money valuation at which the investment house Meitav acquired 10% of the company's shares in March. Following the deal, Keystone holds 63.3% of Egged's shares, the value of which in its books stands at 2.7 billion shekels.
The second main arm of Keystone is in the energy sector, through Keystone Power, in which it holds the Hagit Mizrach and Neot Hovav power plants as well as IPM, with a total capacity of 2,300 megawatts, alongside an additional 2,650 megawatts in development stages. The value of holdings in the energy sector in Keystone's books stands at 1.382 billion shekels. Keystone Power recorded a sharp decline in profit in the first half of 2026 to 43 million shekels, compared to 125 million shekels in the corresponding half of 2025. Behind the decline is the Electricity Authority's decision regarding the limitation of the supplementary tariff, which did not affect the results of the first half of 2025.
Keystone recorded a decline in revenues and profits in both the second quarter and the first half. Revenues for the quarter fell to 73 million shekels, compared to 203 million shekels in the corresponding quarter of 2025, while in the first half, revenues totaled 140 million shekels, compared to 287 million shekels in the corresponding half. The decline was due to both a more moderate increase in the fair value of assets compared to the corresponding period, in which, among other things, revenues of 132 million shekels were recorded from the IPM station, and a sharp decline in dividends that Keystone received from subsidiaries. These totaled 42 million shekels in the first half, compared to 120 million shekels in the corresponding half of 2025 — a decline of about two-thirds.
In the net profit line, Keystone recorded a decline of 77% in the second quarter to 32 million shekels, compared to 142 million shekels in the corresponding quarter of 2025. In the first half, net profit totaled 64 million shekels, compared to 191 million shekels in the corresponding half — a decline of about two-thirds. In contrast to the decline in Keystone's profits, the management fees paid to the fund's management company jumped in the first half from 18 million shekels to 26 million shekels. The management fees of the partners in Keystone — Gil Deutsch, Roni Biram, and Navot Bar — are derived from the volume of assets.
Keystone, which has transitioned to company status, presents in the reports a new target for equity in 2030: 6 billion shekels, compared to a previous target of 4 billion shekels. The planned growth is based on unlocking value in existing assets, including Egged, as well as on the development and operation of additional assets, including the Sorek power plant and the construction of a power plant at the IPM station complex in which the company is a partner. Keystone's equity at the end of the second quarter stood at 3.1 billion shekels, so this is an aspiration to double it within about three and a half years. Keystone's return on equity stood at 31.2% before tax in annual terms, compared to 18.2% in the corresponding period — an increase of 71%. Liquidity balances totaled 316 million shekels and the net financial debt stood at 1.237 billion shekels. Keystone's equity rose by 34% to 3.115 billion shekels, while the net financial debt fell by 6% to 1.237 billion shekels.
Since the beginning of 2026, Keystone has distributed dividends in the amount of 71 million shekels. At the same time, it is awaiting the Ministry of Communications' approval for the large deal in which it acquired, together with Delek Stations and Leumi Partners, the mobile company Hot Mobile for 1.2 billion shekels. Keystone holds 40% of the purchasing partnership. Keystone is traded at a valuation of 3.75 billion shekels after a decline of 19% in the last three months and an increase of 88% in the last year.
