PIK Group, one of Russia's leading real estate developers, will hold an initial public offering (IPO) in May, a source in banking quarters said Tuesday.

PIK Group, which focuses on the development of residential real estate, mortgage financing, construction and the production of construction materials, will offer its stock on the Russian trading floor and also on the London Stock Exchange, the source said.

PIK Group, which was founded in 1994, plans to place 10-15% of its shares and the company's market capitalization will exceed $2 billion by the time of placement, the source said.

The company's board of directors approved March 30 a decision on an additional issue of 58 million ordinary shares with a face value of 62.5 rubles (about $2.4) each.

Today PIK Group is equally owned by entrepreneurs Kirill Pisarev and Yury Zhukov. The company's charter capital is 28.52 billion rubles (about $1.09 billion).

The additional share issue worth 3.63 billion rubles (about $139.4 million) at par will equal 11.3% of the enlarged charter capital, which will rise to 32.14 billion rubles (about $1.24 billion).

In accordance with the decision of the company's board of directors, the additional share issue is expected to be placed via private subscription in favor of Deutsche Bank Trust Company Americas, The Bank of New York, Citibank N.A., Finzhilstroi, FMC Realtors Holding Inc., IBG Development Group Inc., London International Business Limited and International Realtors Inc.

PIK Group posted a net profit of 13.45 million rubles (about $517,000) in the first nine months of 2006.