MTN Nigeria is expected to sound the gong and begin trading on the Nigerian Stock today. Barring any unforeseen circumstances, MTN Nigerian would be listing a total of 20,354,513,050 shares at N90 per share today.
When listed at N90 per share, MTN Nigeria would emerge the second largest company on the Nigerian Stock Exchange after Dangote Cement, with a market capitalisation of N1.83tn. So investors should get their money handy.
Key Things To Note About This Listing By MTN Nigeria
- In March 2019, MTN announced its earnings for the 2018 financial year, recording growth above inflation in full service revenue of 17.2 per cent and the addition of nearly six million new subscribers to the network. Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) was N453.1bn and the company expanded EBITDA margins to 43.6 per cent (excluding the CBN resolution amount)
- The company, also, recently announced aN48.4 billion Profit After Tax, PAT, for its first quarter, Q1, ended March 31, 2019, representing 50.2 percent increase compared to N32.2 billion recorded in the corresponding period in 2018.
- MTN claims it can pay up to 80% of its earnings after tax as dividends.
- The company just acquired more 607,462 new internet users in February, increasing MTN’s data subscription to 46,538,633 as against 45,931,171 in January
- MTN said the proposed listing on the NSE would create a new telecoms asset class for investors and provide a wider group of Nigerians with a chance to participate in the MTN investment opportunity.
- The listing on the NSE is one of the conditions reached in the resolution of the N330bn fine placed on the telco by the Nigerian Communications Commission for its inability to disconnect improperly registered SIM cards.
Related: MTN Nigeria Prepares To List On the Nigerian Stocxk Exchange, Converts To A Public Company
- MTN is not going to list through IPO, but by introduction in the first half of 2019. Listing by introduction means MTN is not offering its shares fully to the public yet.
Listing by Introduction
- To be able to list by introduction, the company would usually have raised capital prior to applying to list, and also must meet the listing requirements — including a minimum number of public shareholders (300 to list on the Main Board; 51 to list on the Alternative Securities Market (ASeM) and minimum public float (20% for the Main Board; 15% for ASeM). ASeM provides a platform for small and mid-sized fast growth companies to raise critical long term capital at relatively low cost to realize their business potential.
What does this mean?
“It means that we will list the company in the initial phases without any public offer or sell-down or initial public offering. I think this will enable us to get the company listed whilst the market still digests the implications of what has happened over the last few months,” The President/Chief Executive Officer, MTN Group, Mr. Rob Shuter, disclosed at the MTN Group’s investor update conference call in February.
“We will in phase two be doing a project to increase the Nigerian participation in MTN Nigeria, targeting more a free float of around 35 per cent than the free float we have today which is around 20 per cent. So, we aim to conclude at least the listing by introduction in the first half of 2019, pretty much as soon as we can, and then subject to market conditions, appetite and demand we would in phase two do the sell-down.’’
Can You Invest In MTN Nigeria’s Shares Now?
- By the NSE’s Rules, MTN would need at least a minimum number of 300 public shareholders to able to list on the Main Board of the NSE where it is listing by introduction.
- Since MTN is going by way of introduction, it may not able to open a larger portion of its shares for subscription as we have noted above. What is going to happen today is that MTN Nigeria would simply introduce the shares privately owned by its shareholders while it was still a private company on the Main Board of the NSE.
- However, it would need at least 300 public shareholders to be able to fully comply with the NSE rules. What to watch out for is that a few of its private shareholders may get to sell their shares if the share prices are favourable to them, to keep the excitement on.
How To Prepare Yourself Better for MTN Nigeria’s Listing
Once there is a willing seller for MTN Nigeria’s shares today who is ready to accept your offer price, then you have got a deal.
However, to participate in MTN’s shares, or other shares of companies you need to do the following:
- Open stock brokerage account with a stockbroker registered in Nigeria. Here is a link to some of the stock brokerage firms in Nigeria;
- Have any amount of money as you want deposited into your stock brokerage account.
- Then notify your stockbroker to purchase shares for you at a price you quote.
- However, if you operate an online trading account on the same online stock brokerage account, then without wasting much time, place an online bid for the shares and hope that an offer is available for you at the right price.
- There you have it! A deal is sealed once your bid is accepted.
- A email notification alarms you of the transaction.
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.