Congratulations to Airtel Africa as they successful listed on the Nigerian Stock Exchange (NSE) on Tuesday 9th July, 2019.
Recently there seems to be a craze to list on the Nigerian Stock Exchange (NSE) especially by companies in the Telecoms Sector. First, it was MTN Nigeria and now Airtel Africa has followed suit.
After the postponement of the listing process of Airtel Africa; which is the one of the continent’s telecoms giant on Friday (5th July, 2019) by the NSE; The company however, on Tuesday (9th July, 2019) satisfactorily met all the pre-requisite requirements for the listing process; and as such officially listed its stocks on the Nigerian Bourse (NSE).
The company listing its 3,758,151,504 ordinary shares at an offer price of ₦363 also added ₦1.3 trillion (US$4.4 billion) to the market capitalization of the Nigerian Bourse. Thus, making Airtel Africa the third (3rd) largest stock on the Nigerian Stock Exchange. That is behind MTN Nigeria valued at ₦2.627 trillion (US$$6.5 billion) and the biggest stock on the NSE; Dangote Cement valued at ₦2.99 trillion (US$8.3 billion).
Airtel Africa have also become the second company to list on both the London and Nigerian Stock Exchange. The first company to attain this dual listing feat is the oil firm Seplat.
Is this really the right move?
To list on the Nigerian Stock Exchange, a company must first go public. The rigours of becoming a Public Limited Company are numerous; and as such most firms prefer to operate as private companies. In as much as going public helps to attract more funds, it also incurs more costs. So why then are these companies desperately longing to list on the Nigerian Bourse?
According Sunil Mittal, Airtel Africa chairman; Airtel Africa listed on the NSE with aims of raising US$750 million needed for financing the company’s strategic operations and also reducing its debt. Before now, most companies depend mostly on bank loans for their operations, but the bank’s high interest rates (for example in Nigeria, interest rates are at almost 33%); have led these companies to sought for alternative means of funding.
Airtel Africa could certainly achieve its aim as the Nigerian market was responsible for 35.9% of Airtel Africa’s revenue during the fiscal year which ended in March 2019.
About 100,000 Airtel Africa shares traded on its Tuesday debut listing. Also there was a 10% increase on the ₦363 initial offer price immediately after the stocks went live.
Airtel Africa, which operates across 14 African countries is a said to be in a hot pursuit to overthrown its main rival MTN Nigeria as the market-leading mobile service provider in the country.
Will Airtel Africa eventually become number one in Africa?
What do you think they can do better so as to achieve their goal?
And where is Globacom and 9mobile in this Nigerian supremacy race?
Use the comment section below to air your views.