Real estate developer Home Afrika is set to list on the NSE’s new segment for small firms, giving it access to a larger pool of capital while also providing its founder shareholders an avenue to unlock their investment.
Dan Awendo, a director at the company said in an interview that the firm was eyeing a listing on the Growth Enterprise Market Segment (GEMS), which was introduced to give small firms with high growth potential easier access to the stock market.
“This is a listing by introduction for shareholders to discover the true value of their holding ,” said Mr Awendo. Home Afrika appointed NIC Capital as the nominated advisor (Nomad), synonymous to a lead transaction advisor, in February to shepherd the listing of the developer’s shares on the Nairobi Securities Exchange’s (NSE).
Home Afrika was founded by Lee Karuri, who is the current chairman, Mbugua Kamau, Lucie Maina (secretary) and Mbira Gikonyo in 2008 as an investment club.
It currently has 128 shareholders and is behind the multi-billion shilling Migaa, a live-in-golf community in Kiambu County. The firm is developing Lakeview Heights (Kisumu County), Llangwe (Kwale County) and Kikwetu (Machakos County).
The firm has projects under construction valued at over Sh12 billion financed through shareholder funds and loans.
Mr Awendo said details of the company’s financials will be disclosed in an information memorandum for the share offer. Industry regulator Capital Markets Authority (CMA) passed laws operationalising GEMS in June 2012.
The market was officially launched in January, but is yet to attract even a single listing.
The GEMS segment has less stringent listing requirements than NSE’s other boards, Main Investment Market Segment (MIMS) and Alternative Investment Market Segment (AIMS).
For one, companies do not have to have a profitability record to list on the GEMS and are required to have Sh10 million minimum capital unlike the Sh20 million requirement for the AIMS and the Sh50 million MIMS boards.
“The GEMS listing is Home Afrika’s introduction to the capital markets. We intend to be players on the REITs, Bonds and Equities markets,” he added.
NIC Capital will be in charge of coordinating the appointment of legal, sponsoring stockbrokers, auditors, share register and other ancillary parties to the deal. The number of shares on offer, the listing price, and information memorandum are expected to take between two and four months to produce.
“Home Afrika also believes that listing on the GEMS market will give it a better opportunity and clear shot at raising funds by issuing commercial paper and, or, bonds,” said Mr Awendo.