By Modupe Gbadeyanka
Feelers reaching us indicate that investors in the Nigerian capital market are getting prepared for the all-important announcement to be made today by Airtel Nigeria of its share price and size.
This month, the company, which is the third largest telecommunications firm in the country, commenced the sale of 501.125 million and 716.406 million shares to Nigerians at N363 to N454 per unit to be listed on the Nigerian Stock Exchange (NSE) on Thursday, July 4, 2019.
However, this sale, through book building, was mainly for institutional investors and high net-worth individual investors.
Airtel had said an application was already submitted to the NSE for listing, with Barclays Securities Nigeria and Quantum Zenith Securities Investments Limited as the issuing houses.
Since the sale of the shares began, there have been demands for them. Yesterday, the exercise ended and investors are awaiting the announcement of the share price and size today as promised by the company in its brochure.
We hear that investors are optimistic of a fair price for Airtel Nigeria shares so as to give many of them the opportunity to invest in the telecom company.
Through the share listing on the NSE, and Airtel Africa IPO on the London Stock Exchange, the telco intends to use the net proceeds to reduce a debt of $750 million and achieve a targeted leverage ratio of 2.5x, based on underlying EBITDA for the year ended March 31, 2019.
There are indications that the firm hopes to use the book-building to harvest relevant information about the shares and determine the price of the IPO.
It is also expected to be use by the company to understand the value investors placed on the company and allow the telco to fix a price threshold.
“The company wants to size up ahead of time the success of the offer and what kind of valuation people are placing on the company.
“When they see different offers, they will look at a threshold whereby anyone below it will not be able to buy the shares. This is just to test the heartbeat of the market in terms of pricing and demand,” an analyst was quoted as saying.
