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Update2: Airtel to begin trading today on NSE at N363 per share

Airtel Africa

Telecom giant, Airtel Africa, will be listed on the Nigerian Stock Exchange (NSE) today, July 5, at the price of N363 per share.

The secondary listing will mark the conclusion of a price discovery through a book building process that ended on June 28, 2019. Further price discovery is expected to continue on the floor of the Exchange, the NSE said at a pre-listing media briefing in Lagos Thursday.

The listing will add about N1.36 trillion (about $4.44bn) to the market cap. This will make Airtel the third-most capitalised company on the NSE, after Dangote Cement (N3.042trn) and MTN Nigeria (N2.626trn). MTN listed on the NSE in May this year by introduction.

Airtel Africa operates in 14 African countries. In Nigeria it has 45.433 million subscribers, making it the third-biggest telecom operator in the country, after MTN with 64.73 million subscribers, and Globacom with 46.38million, according to figures on the website of the Nigerian Communications Commission (NCC), which regulates the industry.

The company will be marked below Listing Requirements to allow it time to increase its number of Nigerian shareholders to at least 300. Its free float is 25 percent, which is reasonably above 10 percent which the NSE requires for cross-border listing.

It was granted a waiver on cross-border listing because it had done primary listing on the London Stock Exchange (LSE).

BusinessDay reported this week that 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.

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 in print.

Ahead of Airtel Africa admission for trading on the NSE, analysts at Lagos-based Meristem Securities Limited had in their investment recommendation advised investors to bid between the N363 and N375.53 price range.

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 35.9 percent, 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.

The proceeds from the issue of the ordinary shares will be directed towards the reduction of debt of Airtel Africa.

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.