By Adedapo Adesanya
The Nigerian Stock Exchange (NSE) on Wednesday, January 29, launched its Growth Board to provide issuers at the bourse an avenue to leverage on the opportunities for listing, raising long term capital and facilitating liquidity in the trading of their shares.
As parts of efforts to cater for an estimated 41.5 million Micro, Small and Medium Enterprises (MSMEs) operating in Nigeria, the launch of the Growth Board will help to encourage the listing of growth companies and provide them with a cost-effective platform.
With this platform, MSMEs will be able to raise the capital needed to scale, attract investors, enhance corporate visibility and put in place a regulatory structure that fosters growth.
It was also noted that this will offer investors the opportunity to invest in such enterprises with potential for high returns/capital gains by offering entrepreneurs opportunities to access finance and scale their businesses.
Speaking at the event, the Chief Executive Officer of the Exchange, Mr Oscar Onyema, said the Growth Board will help to Nigerian capital market to meets the needs of businesses at every phase of their life cycle.
Speaking further, he disclosed that the newly launched board will encourage companies with high growth potential to seize the opportunity of raising long term capital and promote liquidity.
Mr Onyema added that the board will cater for various market segments and to ensure all spectrum of businesses/companies in various growth phases can be listed and also highlight benefits with a platform and access to potential companies for listing on the NSE.
For the MSMEs, which as a crucial sector contributes up to 48 percent to Nigeria’s Gross Domestic Product (GDP), only nine are listed on the NSE and have a total market capitalisation of N7 billion as at January 2020 and with the newly instituted board, they can list on the Growth Board Entry or Standard Segment.
The Entry level to the Board is targeted at startups, micro, small enterprises, medium businesses with a market capitalisation from N50 million to N500 million with a public float of 10 percent, while for Standard Growth Board is opened to medium, venture type firms, and established businesses with a market cap of N500 million to N4 billion with a public float of 15 percent.
The Growth Board is expected to attract small to medium-sized companies that exhibit the potential for fast growth in their corporate earnings and are in the growth phase of their business cycle. It will also offer investors the opportunity to invest in such companies with potential for high returns/capital gains.”
In line with its efforts to deliver value to listed companies, the exchange also presented the companies aspiring to list or are listed on the Growth Board with access to its Value Added Services (VAS) program that are designed to: create competitive edge for listed companies, facilitate new listings, stimulate investors’ interest through enhanced information delivery and assist companies in complying with post listing obligations to retain their listing status.
He stated that Growth Board companies will enjoy the full complement of Value Added Services (Institutional Services; Investor Relations; Analyst Coverage, Corporate Access and Corporate Governance), expanded Designated Advisers, reduced NSE fee structure, reduced pre and post listing obligations and increased turnaround time for approvals and time to market.
Modupe Gbadeyanka