Updated: Offers fly in from investors ahead of MTN’s listing 

Investment bankers and buy-side analysts confirmed that MTN Nigeria’s much-awaited listing on the Nigerian Stock Exchange will happen this Thursday.

They say offers have been flying in from investors looking to take position in the stock of what would be the second-largest listed company in Nigeria by market capitalisation, and largest by revenue.

“We are getting many requests from investors asking to be kept informed of opportunities for retail clients to partake in the listing by introduction,” a buy-side analyst at a Lagos-based investment bank told BusinessDay.

“We assured that we will guide them accordingly before and after the process is completed Thursday,” the person who was not authorised to speak said.

MTN Nigeria will be doing a listing by introduction.

This means the chances of retail participation will depend on if there are any existing shareholders that are willing to sell.

MTN would be listing about 20.35 billion shares, at possibly an N80-90/share price range, according to the consensus analysts’ estimates.

That would value the stock at around 5 times Earnings Before Interest Tax, Depreciation and Amortisation (EBITDA). That’s almost half the frontier average, suggesting that at N90 per share, MTN will be undervalued compared to telecommunication companies in frontier markets.
Analysts at Cordros Capital believe the stock is worth NGN194 per share, implying a 116-143 percent upside on the proposed listing price.

Upon listing, MTN Nigeria will be the most capitalised stock in the Nigerian market after Dangote Cement plc, at market capitalisation of N1.8 trillion.

Nigeria is Africa’s largest telco market, with still attractive upside potential and relatively less cyclicality and analysts are positive of MTNN’s long-term outlook.

“MTN’s performance track record is impressive, supported by scaled market position and the first-mover advantage,” Oluwagbounmi Adejuwon, a private wealth manager at Cordros, said in a note to clients.

Tapping from the parent company, and like global peers, MTN is also transitioning its revenue base from voice to data and digital services.

The company refreshed its management in 2017 to support the execution of new growth initiatives developed following a challenging 2015.

Post the IPO, MTNN’s market capitalisation will be in the league of the NSE’s top 5, ranging from NGN522.2 billion to NGN3.05 trillion.

The current five most-capitalised companies in the market have, on average, delivered returns superior to the broader market in the last eight years, underpinned by factors analysts believe MTNN equally delivers. These factors include stable earnings and consistent dividend, market leaders in their respective sectors, and quality corporate governance.

On this basis, it is quite understandable that investors are falling over one another to get a hold on MTNN’s stock.



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