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Airtel Africa Initiates IPO On The London Stock Exchange, Public Trading Still July 4

June 29, 2019

Airtel Africa has had its Initial Public Offering ( IPO ) in both London and Nigeria, but the real IPO, in which the general public may be able to buy Airtel’s shares begins from the 4th of July, 2019. Right now, it appears, Airtel Africa is selling to investors below what they were initially priced, on the London Stock Exchange.

Airtel’s stocks on the London Stock Exchange fell as much as 15 percent to 68p after Africa’s second-largest mobile operator listed on the London Stock Exchange, knocking £500m off its opening valuation to give it a market capitalization of around £2.6bn.

Here Are The Facts

The IPO is for institutional investors and high net worth individuals only
The general public may be able to deal in Airtel’s shares by July 4.
For the IPO, Airtel is backed by SoftBank an issuing house and had priced its initial offering at 80p per share, but this poor IPO in London saw the company perform below what it secured in two recent private funding rounds.
The African subsidiary of Indian telecoms giant Bharti Airtel had priced its shares at 80p, at the bottom of its previously announced 80–100p price range.
This means that its current valuation now stands at around £3.1bn (NGN 1.4 trillion or $3.9 billion). This is already significantly below the valuations implied by earlier funding rounds.
Airtel Africa secured $1.25bn from a consortium of investors including private equity house Warburg Pincus, Singapore’s Temasek, SoftBank and Singapore Telecommunications at a valuation of around $4.4bn, in October last year.
A $200m investment by the Qatar Investment Authority earlier this year put its valuation closer to $5bn.
From the combined Nigerian and London IPO, Airtel Africa — which operates a telecoms and mobile money business across 14 African countries — raised £595m.
The whole of the shares issued in the IPO represented 19 percent of Airtel’s total stock.

“This is a proud moment for the team that has built Airtel Africa into the second-largest mobile operator in Africa. We are now the first telecom company to simultaneously list on the Premium segment of the London Stock Exchange and Nigerian Stock Exchange through an IPO.”

Airtel’s IPO is For Institutional Investors. Ordinary Nigerians and the General Public Can Begin To Trade In Airtel’s Shares By July 4 On Both The London And The Nigerian Stock Exchanges

“The offer consists of an institutional offer only. Ordinary Shares will be offered pursuant to the Global Offer (a) to certain institutional investors in the United Kingdom and elsewhere outside the United States in reliance on Regulation S, (b) in the United States only to those reasonably believed to be Qualified Institutional Buyers, QIBs in reliance on an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and pursuant to the Nigerian Offer © in Nigeria to Qualified Institutional Investors and High Net Worth Investors as defined in Rule 321 of the Nigerian Securities and Exchange Commission, SEC Rules pursuant to a book building process (the “Nigerian Offer”)” the prospectus stated.

Why The Nigerian Stock Exchange and Not The Johannesburg Stock Exchange, Which Is The Largest In Africa, Was Chosen For The African Listing

According to the prospectus of the offer, Nigeria represents the Airtel’s largest single country subscriber base, comprising 37.6 percent of the Group’s total subscribers as at 31 March 2019, with 43.4 percent of subscribers in East Africa and the remaining 19.1 percent in the Group’s Rest of Africa segment.

In the year ended 31st March 2019, revenue in Nigeria was $1.1 billion (representing 35.9 percent of the Group’s revenue in the year) and the underlying Earnings Before Interest Tax Depreciation and Amortisation, EBITDA was $550 million.

In Nigeria, revenue attributable to mobile voice services in the year ended 31st March 2019 was $739.8 million

The prospectus said the company wants to raise money so it can use it to pay down some of its crushing debts.

Why Airtel’s Shares Are Worthy Of Public Subscription

Airtel reported revenues of $3 billion for the year ended March 2019 compared to $2.9 billion the year before.

The company also reported a profit of $450 million in 2019.

Airtel posted losses of $134 million and $769 million in 2016 and 2017 respectively.

Timelines For The Offer

The offer closes June 28 and allotment of new ordinary shares to the shareholders begins June 29, 2019, while the crediting of ordinary shares to accounts start July 3, 2019.

The Nigerian admission and start of unconditional dealings on the Nigerian Stock Exchange, NSE is expected from July 4, 2019

Click here to download and read Airtel Africa ’s IPO prospectus.

Here is a list of stock brokerage firms in Nigeria through which you may be able to purchase or sell shares on the Nigerian Stock Exchange.

Charles Rapulu Udoh

Charles Rapulu Udoh is 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 organizations 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.

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Airtel Africa Set To Offer $1bn Shares To The Public On The London Stock Exchange

May 12, 2019

Any time from June, Airtel Africa is going to the London Stock Exchange to list its shares for subscription. A total of $1bn worth of shares would be open for subscription. The IPO would be one of London’s biggest this year.

A Breakdown Of Facts

Airtel Africa is made up of Airtel Chad;Airtel DRC; Airtel Gabon; AirtelTigo Ghana; Airtel Kenya; Airtel Madagascar; Airtel Malawi; Airtel Niger; Airtel Nigeria; Airtel Congo; Airtel Rwanda; Airtel Seychelles; Airtel Tanzania; Airtel Uganda; Airtel Zambia);

The company had a net profit of $83mn in the fourth quarter of the 2018–19 year to March, driven by its Airtel Money platform, after a loss of $49mn in the year-earlier quarter.

Investors including Warburg Pincus, Temasek, Singtel, SoftBank and the Qatar Investment Authority (QIA) have invested $1.45b in Airtel Africa through primary equity issuance, with the proceeds being used to reduce debt.

Indian broker Motilal Oswal, in research on May 7, forecast that the Airtel Africa’s mobile subscriptions will increase by 10.7% for the full year 2019–20, while wireless traffic minutes will show growth of 18%.

India’s Bharti Airtel established its presence in Africa by buying Kuwait-based Zain’s Africa operations for $10.7 billion in 2010. The company has grown to become Africa’s second-largest telecoms company, with over 94 million customers, and is in the top two carriers in most of the countries where it operates.

According to Ovum’s Africa Digital Outlook 2019, mobile revenue in Africa will increase from $54.9b in 2017 to $68b in 2022. Non-SMS mobile data revenue — from mobile broadband access and mobile digital services — is expected to more than double to $32.1bn over that period.

Going On IPO Despite Citron’s Claims Against Jumia

Although market appetite shown for Africa e-commerce company Jumia in its New York IPO in April may mean that the time is right, a report from Citron Research has, however, put a big stain on Jumia’s IPO filing. This is not however expected to affect Airtel’s credibility. Unlike Jumia, Airtel Africa is a profit-making company.

Related: Behold Jumia, The German Company That Became A Nigerian Fraud

‘‘In theory, the Jumia IPO should not affect demand for Airtel Africa shares because they have different business models,’’ argues Andrew Sekandi, an investment adviser at Alpha Sierra in London.
‘‘Airtel Africa, deserves to be judged on its own merits. But capital markets being what they are, Jumia’s success may draw in some retail investors and maybe even some institutions that would not previously have considered betting on an Africa-focused stock. Some investors will see the Jumia and Airtel IPOs as essentially a bet on the growth of African consumer markets and the middle class, so this could help Airtel,” Sekandi says.

‘‘Airtel Was Saved by Exapansion Into The African Market.’’

Image result for Airtel Africa revenue chart

Airtel was “Saved by Africa” in the face of falling profit margins in India, according to October 2018 research from Bond Critic published on Smart Karma. Bond Critic argued that Airtel’s expansion into Africa has been credit positive. Motilal Oswal, which rates Bharti Airtel, says the Africa business has been playing a key part in overall growth for the Indian company.

Strong momentum in Africa should continue on the back of potential to increase revenue share in some markets and growth in the use of Airtel Money, Motilal Oswal says.

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.