The price at which Interswitch brings its shares for sale in the public is now the focus of many prospective investors who are eagerly awaiting the Initial Public Offering (IPO).
This comes as news broke that Interswitch, the Nigeria-based payments firm, has hired advisers including, JPMorgan Chase, Citigroup, and Standard Bank Group as advisors for the IPO in London and Lagos later this year.
“We should see an uptick in the stock performance of Interswitch upon listing on the back of a good pricing which investors perceive as a fair value for the stock,” Gbolahan Ologunro, research analyst at CSL stockbroker told BusinessDay.
“However, if priced at a discount to what investor’s fair value is then the reverse may be the case.”
The company had pulled earlier plans to list in 2016 after the price of crude oil fell dramatically, causing dollar shortage and a contraction in Nigeria’s economy.
Analysts see uptick in economic growth accelerating payments between companies and thus revenues at payment services providers, but the Lagos stock market has not been impressive lately as investors shy away from stocks.
“A look into sub-Saharan Africa, the industry is more or less in its growth stage, hence increased investors’ excitement on the news of the intention of Interswitch to list,” Ologunro said.
Interswitch tried a dual IPO two years ago and this second attempt that is now underway comes at a time when the Nigerian stock market has lost over 11percent of its value since the beginning of this year.
The initial public offering may value the financial technology company at $1.3billion to $1.5billion, analysts said.
The potential listing would follow those of two other major African and Middle Eastern tech company share sales this year. Jumia Technologies, dubbed the Amazon of Africa, listed in New York earlier this year, while Dubai-based payments firm Network International Holdings went public in London.
Iheanyi Nwachukwu & David Ibidapo
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