Airtel Uganda completes listing on local securities exchange
Airtel Uganda this week successfully listed 4.36 billion shares on the Uganda Securities Exchange (USE) following its initial public offering (IPO). The IPO attracted 4,614 investors, resulting in the takeover of 54.45% of the initially offered eight billion shares.
A notable aspect of this listing is the significant participation of retail investors, with 4,600 individuals taking part. This surge in retail investor interest is remarkable given their historical lack of enthusiasm for local company offerings, often attributed to inadequate awareness and limited resources to acquire substantial stakes in listed firms.
Airtel managed to boost participation by doubling the shares available for both ordinary Ugandans and institutions during the offering. However, the level of participation is deemed relatively low when compared to the 7,000 individuals who opened Securities Central Depository (SCD) accounts during the IPO that commenced on August 30, 2023. Nonetheless, it marks an increase in retail investor engagement compared to previous public offerings.
Key Takeaways
The Shs211 billion ($56 million) raised from the share sale by Airtel Uganda will be allocated to fund capital expenditure and operating infrastructure, enhancing the company's competitiveness in the market. This successful listing contributes to Uganda's total market capitalization, now valued at Shs11 trillion, equivalent to 6% of the country's GDP. Airtel Uganda is the second telecom company to go public in the country after MTN Uganda in 2021. The move aligns with new license requirements for telecom companies, mandating them to list 20% of their stake to Ugandans. Airtel's listing is anticipated to attract more foreign investors, potentially shifting the balance as foreign investors currently dominate the trading of Uganda's listed companies, accounting for 60%. The aim is to enhance market competitiveness and liquidity. As part of its financial outlook, Airtel Uganda expects to distribute a total dividend of approximately Shs500 billion for the fiscal year ending December 31, 2023, encompassing quarterly payments, according to the company's prospectus.
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