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Here’s what to know about Transcorp Power listing by introduction

Buy pressure boosts Transcorp Power value by almost N1trn

Recently, Transcorp Power Plc (TPP), a subsidiary of Transnational Corporation Plc (Transcorp) listed its 7.5 billion ordinary shares of 50 kobo on the Main Board of the Nigerian Exchange Limited (NGX).

Transcorp Power Plc listed by introduction at N240 per share, but the company share price rose to N264 at the close of trading on Monday. The company was listed under the utilities sector (sub-sector: Electric Power Generation).

Listing by Introduction – that is listing of the entire issued and fully paid-up ordinary shares of Transcorp Power on the NGX, without issuance of new ordinary shares in the Company or any capital raising.

Transcorp Power Plc undertook the listing by introduction to: provide a platform through which new investors can participate in the Company’s capital and future growth prospects, thereby diversifying existing shareholder base.

It listing also positions the Company for access to an increased variety of capital raising options; as well as further enhance its corporate visibility and awareness. The listing of Transcorp Power also contributes to the growth of the NGX and the Nigerian capital markets.

Before the listing, the company’s shareholding structure was as follows: Transcorp Plc (51.6percent), Rich Point Limited (33.3percent), Woodrock Energy Resources Limited (7.4percent), and Others (7.7percent).

The listing by introduction implies that existing shareholders in the Company are offering a portion of their ordinary shares in order to create liquidity in the market and enable institutional investors and members of the investing public to acquire shares in the Company.

Post-listing, the company’s shareholding structure will reflect the ongoing trading pattern of its shares between existing shareholders and new investors, as transacted on the NGX.

This listing by introduction does not represent any change in management or strategy and that Transcorp Power remains a full member and subsidiary of Transcorp Group. Transcorp Group shareholders will continue to benefit from the growth prospects of Transcorp Power through their existing participation in Transcorp Group.

“Transcorp Power Plc (TPP) stands as a leading player in Nigeria’s upstream power sector, boasting an installed capacity of 972MW. The company’s strategic location, commitment to self-sufficiency, and sustainability initiatives position it for continued growth.

“The firm’s core service offerings include capacity charges, energy delivered, and ancillary services. TPP also boasts a robust supply chain network and an experienced management team, which gives the firm an edge over other power sector players,” Meristem analysts said while initiating coverage on Transcorp Power Plc.

“Our assessment of the firm’s financial performance reveals a resilient ascent marked by consistent revenue growth and strategic asset optimisation. Looking ahead, we anticipate sustained revenue expansion for Transcorp Power, driven by existing capabilities and emerging opportunities.

“The company’s strategic initiatives, international market presence, and focus on operational efficiency position it for long-term success. We arrived at a fair value of N305.33 per share for Transcorp Power Plc by using a blend of various valuation models considering the company’s growth potential, risks, and overall market factors,” Meristem analysts further said.

Also, CardinalStone research analysts said, “We initiate coverage on Transcorp Power Plc (TPP) with a 12-month Target Price (TP) and projected market capitalisation of N323.64 and N2.4 trillion, respectively.

“Our TP implies a price return of 22.6percent and a buy recommendation on the stock. Our outlook on the stock is premised on projected improvements in return metrics and is consistent with the following,” they said.

“The company currently accounts for 7percent of Nigeria’s installed grid capacity but generates 10percent of the country’s power needs, with its leadership position in the West African Power Pool (WAPP) and planned strategic alliances with DISCOs, eligible customers, and state governments leaving legroom for output growth in the near term,” CardinalStone research analysts added.

Transcorp Power Plc share price rose by 10 percent on debut trade, which saw its N1.8trillion capitalisation rise by N180billion. The company becomes the second Power company listed on the Stock Exchange following Geregu Power Plc.

“The listing was a strategic move by the company to provide a platform for new investors to be admitted and to diversify existing shareholder base while positioning the Company for access to a larger pool of capital raising options,” said Emmanuel Nnorom, chairman, Transcorp Power Plc.

Nnorom who spoke at the “Fact Behind the Listing” after the closing Gong also noted that the Company was targeting an annual revenue in excess of N500 billion by 2031 in line with its long-term strategy and objective.

“We aim to achieve this by diversifying our energy mix, make additional investments in the renewable energy space. Intensify our efforts around capacity recovery and further expansion within our plants.

“Additionally, we are going to deepen our footprint not just within Nigeria, but across West Africa while growing our market share,” Nnorom said.

This, he explained would be attained by leveraging the company’s strong corporate governance and sustainability framework and partnership with key stakeholders.

He added that TPP has demonstrated a strong financial track record impressively raking up revenues from N55.9 billion to N142.2 billion in five years (2019 – 2023)

This, according to him, is driven by a surge in energy delivery and capacity charge, coupled with our strategic expansionary moves.

Meanwhile, TPP operates the Ughelli Power Plant in Delta State, with an installed capacity of 972 Megawatts (MW)

Umaru Kwairanga, chairman of NGX speaking on the listing said it is a significant milestone for the company, the stock exchange and the investors, adding that the listing is a proof of the resilient innovation and excellence within Nigeria’s power sector.