Airtel Is Gearing up to Raise $216 Million through Its Ugandan IPO, the Largest in the Country’s History

Airtel Is Gearing up to Raise $216 Million through Its Ugandan IPO, the Largest in the Country’s History

Airtel Uganda Ltd., a subsidiary of Airtel Africa Plc, is gearing up to launch an initial public offering (IPO) aimed at raising an estimated sum of up to 800 billion shillings ($216 million).

This move would mark a significant milestone as the nation’s most extensive share sale, reflecting the company’s determination to tap into the local market and fulfil regulatory obligations.

Details of the IPO

BNN Breaking understands that the telco has pegged its IPO at a price of 100 shillings per share, effectively valuing the telecommunications giant at an impressive 4 trillion shillings. The IPO will encompass the sale of a 20% stake, equivalent to 8 billion shares, on the Uganda Securities Exchange, a strategic move in line with regulatory requirements.

Timeline and Trading Debut

The IPO offer is scheduled to commence on Wednesday and will continue until October 13, as outlined in the released prospectus. Following the closure of the offering period, Airtel Uganda is set to debut on the Uganda Securities Exchange on October 31, embarking on a new phase in its corporate journey.

Uganda’s Local Shareholding Drive

The Ugandan government has taken proactive measures to stimulate local participation in the economy, particularly within the capital markets. Telecommunications entities operating in the nation are mandated to offer at least 20% of their stakes in the local bourse, an initiative aimed at boosting indigenous ownership and enhancing the depth of the country’s capital markets.

Potential Market Value Milestone

Should Airtel Uganda successfully attain its ambitious IPO target, the company is poised to ascend to the position of Uganda’s most valuable enterprise by market capitalization. This would underscore the growing prominence of the telecommunications sector within the country’s economic landscape.

Comparative Insight: MTN Uganda’s Journey

In 2021, MTN Uganda Ltd. entered the bourse with a significant listing. Although its IPO was under-subscribed, resulting in $150 million raised—approximately two-thirds of the target—the company encountered initial challenges. MTN Uganda’s share price experienced a 15% drop from its 200 shilling offer price, reflecting the complexities and fluctuations in the market.

Key Players in the IPO Process

In the meantime, Absa Bank Uganda Ltd. has assumed the role of lead transaction adviser for Airtel Uganda’s IPO. Crested Capital, on the other hand, is spearheading the role of lead sponsoring broker, contributing to the successful execution of the share sale.