MegaFon , Russia's second-largest mobile phone operator, has asked its local regulator for permission to list its shares in London for what would be the world's biggest initial public offering since Facebook's in May.

The company, in which Russia's richest man Alisher Usmanov took control in a complex deal in April, is looking to float a 20 percent stake that could be worth as much as $4 billion, sources familiar with the matter have said.

The float would offer investors exposure to a firm that has positioned itself aggressively for the rollout of high-speed mobile data services loved by iPhone-toting urban Russians, and is backed by the impeccable Kremlin connections of Usmanov, whose fortune is estimated by Forbes magazine at $18.1 billion.

In a filing, MegaFon requested permission from Russia's financial markets regulator to list up to 123 million shares abroad, equivalent to 19.9 percent.

"We are considering the possibility of holding an IPO," MegaFon said in response to questions about the filing. "The timing of the public offering will depend on market conditions."

The dismal post-IPO performance of social network Facebook's $16 billion dollar offering has hit investor appetite for new stock offerings, though global stock markets have drifted higher through the summer, boosting the confidence of investors and new issuers alike.

"There are very few liquid ways to play Russian domestic growth," said one analyst who declined to be named.

There have been few sizeable Russian deals since aluminum group Rusal <0486.HK> raised $2.2 billion in Hong Kong in January 2010.

It would be a defining deal for Usmanov, an Uzbek-born metals and mining magnate who has shown a deft touch as a tech investor and made 10 times his money investing in Facebook stock three years before it listed.

One source close to the deal said a launch of the IPO is probably three to four weeks away. MegaFon CEO Ivan Tavrin signaled in June that an IPO was some way off due to difficult market conditions.

Sources have previously said Goldman Sachs and Morgan Stanley had been appointed to lead the IPO. Other banks including Sberbank , Citi , Credit Suisse and VTB are also involved, sources and Reuters publication IFR have said.

NEXT GENERATION

Investors will be keen to buy a slice of the fast-growing company, analysts said, which comes as Russian mobile operators jostle for position in the race to sell fourth-generation mobile services to the public.

Megafon has been riding that wave. In July, Usmanov increased his influence in Russia's telecoms sector by combining his MegaFon stake into a holding company he controls that will own state-backed next-generation operator Scartel.

MegaFon was one of four companies to win a fourth-generation license in July, allowing it to provide fast wireless internet services using the LTE service, which is expected to become the global industry standard. It launched LTE in Moscow in May, using Scartel's network.

"MegaFon looks attractive because it is the leader on the Russian mobile internet market," Sergei Libin, Moscow-based analyst at Raiffeisen.

The company's second-quarter revenues rose 14 percent and operating income before depreciation and amortization (OIBDA) increased 12 percent. However, its OIBDA margin was 42.3 percent compared to 43.1 percent the year earlier, lower than at U.S.-listed rivals Vimpelcom and MTS .

Megafon is also aiming to expand its retail presence in Russia. The company is in negotiations to buy a stake in Russian cellphone retailer Euroset, two sources familiar with the situation said on Tuesday. Euroset co-owner Alexander Mamut has been looking to sell his 50.1 percent stake since last December.

Megafon is majority owned by Usmanov's AF Telecom, which holds 50 percent plus one share of the company, while 35.6 percent is owned by Nordic telecoms firm Teliasonera , and 14.4 percent is held by the company as treasury stock.

At the time of the April deal, the parties announced that Teliasonera would reduce its holding in MegaFon to 25.1 percent through the proposed IPO, while the remainder of the offering would be made up of treasury shares.

(Additional reporting by Douglas Busvine, Maria Kiselyova and Kylie MacLellan; Editing by Will Waterman)