Airtel Africa Plc was able to raise about N14 billion or $38.3 million, from its recent initial public offering (IPO) in the Nigerian market, sources tell BusinessDay.
Airtel Africa, a unit of India’s Bharti Airtel Limited after listing on the London Stock Exchange (Primary Listing) intends to list its shares on the Nigerian Stock Exchange (Secondary Listing) on Thursday July 4.
Details of the capital raise show that out of the $750million (N270billion) which the company targets to raise in the global offer assuming the over-allotment option is exercised, $600 million (N216billion) was meant to come from the London Stock Exchange (LSE); while $150million (N54billion) was to come from the Nigerian Stock Exchange (NSE).
The Book Building for the planned Initial Public Offering (IPO) closed on Friday June 28. Through the Book Building process, the underwriters attempted to determine the price at which the IPO will be offered.
In the Nigerian market, Airtel Africa Plc raised only N14billion which represents on 26 percent of the targeted capital from this market, sources told BusinessDay.
That underwhelming amount raised from Nigeria according to a market source is a reflection of investors wariness of emerging market Telecommunications firms, for now.
“Investor apathy, the MTNN issue and the governance issues as a result of Oando/SEC crisis are among negative factors affecting new listings,” said a market operator who didn’t want his name on print.
All these factors, which according to him are making investors to take a wait and see approach, come on the heels of confidence issues in the Buhari-led government policies.
Ahead of Airtel Africa admission for trading on the Nigerian Stock Exchange (NSE), analysts at Lagos-based Meristem Securities Limited had in their investment recommendation advised investors to bid between the N363 – N375.53 price range.
The offer price (determined via Bookbuild) was at a range of N363 – N454 (80 –100 pence). The number of shares offered at the lower price range was 676.406million units while at the top of the price range are 541.12million units.
The proceeds from the issue of the ordinary shares will be directed towards the reduction of debt of Airtel Africa. The market capitalisation of the company was about $3.46 billion as the stock rose 1.4 percent to 72 pence in London trading as at2.30p.m.
Meristem Securities analysts said they used a blend of various valuation methods and arrived at a fair value of N375.53 (83 pence) for the offer.
“The company possesses decent growth prospects across its operating markets, particularly in Nigeria which is the single largest contributor to company revenue, at 35.9percent, and is key to the company’s strategy of driving revenue growth. However various operational risks existing in some of its markets may pose significant risks to the health of the overall business,” Meristem Securities said.
Airtel Africa Plc is a telecommunications and mobile money services provider, with presence in 14 countries in Africa, primarily in East Africa and Central and West Africa.
Raghunath Mandava, Airtel’s chief executive, said he was “delighted by the strong response” the offering had received. “This is a proud moment for the team that has built Airtel Africa into the second-largest mobile operator in Africa. We are now the first telecom company to simultaneously list on the Premium segment of the London Stock Exchange and Nigerian Stock Exchange through an IPO.”
Airtel Africa is a member of the Bharti Airtel Group, a global telecommunications company, which (together with the company) has presence in 18 countries across Africa and Asia. It offers a wide range of telecommunication solutions to its subscribers such as mobile voice and data services, as well as mobile money services across its operating subsidiaries.
The company is the second largest mobile operator in Africa by active subscribers, serving an aggregate of 98.9 million subscribers and 14.2 million money subscribers across its subsidiaries as at March 2019.
Ahead of the listing on the NSE, Airtel plans to holding a pre-listing media interactive session on the NSE tomorrow July 4, the first of its kind lately.
Iheanyi Nwachukwu
