Airtel Africa Mulls IPO for $4bn Mobile Money Subsidiary

By Adedapo Adesanya

Mobile network operator, Airtel Africa Plc, is considering selling the shares of its mobile money arm, Airtel Money, to members of the public through an Initial Public Offering (IPO). This transaction is expected to raise about $4 billion.

According to Bloomberg, which first reported the move, the firm has been in talks with possible advisors for a planned listing of the shares from the initial public offer on a stock exchange, which is yet to be decided.

It was reported some considerations include London, the UAE, and Europe, Bloomberg reported Wednesday, citing sources with knowledge of the move.

Airtel Money needs to be separated from its parent as a standalone entity before it can attain the prestige of trading on a stock exchange.

Estimating the company at $4 billion is higher than its valuation of $2.65 billion in 2021, after receiving investments from TPG—$200 million—and Mastercard—$100 million—valuing the unit at $2.65 billion.

That implies the valuation of Airtel Money, the group’s fastest-growing subsidiary, has expanded by more than half since 2021.

In Nigeria, the pace of growth for the mobile money business has been quickened by the launch of its SmartCash Payments Service Bank (PSB), which has witnessed dramatic adoption in its two years of operation, helped by concerted efforts by the central bank to drive cashless transactions.

Bloomberg quoted sources as saying both the plan to list the mobile money division this year and the valuation amount are tentative.

The development comes weeks after Airtel Africa reported a 99.6 per cent fall in net profit in the nine months to December, after a $484 million foreign exchange, driven by sharp devaluations of the Nigerian naira, nearly plunged it into a loss.

The company is currently in the middle of a share buyback to reacquire $100 million worth of its shares traded in the open market.