Ndindi Nyoro books Sh200m gain from Kenya Power stake

Ndindi Nyoro

Budget and Appropriations Committee chair Ndindi Nyoro at County Hall on July 22, 2024.

Photo credit: Dennis Onsongo | Nation Media Group

Kiharu MP Ndindi Nyoro has seen the value of his stake in Kenya Power jump to Sh210 million from Sh33 million six months ago after the stock’s recent rally of more than 300 percent, underlining the large gains available to investors who acquire shares when valuations are depressed in a bear run.

Latest regulatory filings show that the second-term lawmaker held 30 million Kenya Power shares by the end of December, equivalent to 1.54 percent of the company, having increased his stake from 20.08 million shares at the end of June 2024.

The rise in Kenya Power’s share price by 322 percent from Sh1.66 in June to the current price of Sh7 has rewarded shareholders like Mr Nyoro.

The large capital gain has outperformed the Nairobi Securities Exchange (NSE) market capitalisation growth of 19 percent in the period.

The company is also set to distribute a dividend of Sh0.70 per share at the end of this month, which will hand Mr Nyoro a payout of Sh21 million and take his overall gain in the company (dividend plus capital gain) to Sh198 million over the six-month period.

The dividend is due to shareholders who were on the company’s books by December 2.

Mr Nyoro, who chairs the Budget and Appropriations Committee in the National Assembly, said in a 2022 interview that he started his investment journey in the equities market as a first-year student at Kenyatta University. He later operated an investment firm before plunging into elective politics.

He has accumulated the Kenya Power shares over a period of five years, having said that the company was undervalued relative to its book value and revenue. Previous regulatory filings and NSE share price data indicate that he bought the bulk of his stock at between Sh1.50 and Sh1.80 per share.

The MP is the largest individual shareholder in the parastatal ahead of Naran Khimji Hirani and Virji Khimji Hirani, who jointly hold 24.06 million shares (1.22 percent stake) which are currently valued at Sh168.4 million. They are also set to earn Sh16.84 million in dividends from their stake.

The Hiranis held 23.85 million shares in June, which had a value of Sh39.6 million at the time.

Kenya Power’s top shareholder is the government with a stake of 50.1 percent or 977.6 million shares, currently worth Sh6.84 billion.

Similar to Mr Nyoro and the Hiranis, a majority of the other top individual shareholders in Kenya Power also added to their stakes in the second half of 2024, likely with an eye on the emerging capital gains and the dividend payout.

The third-largest individual owner, James Ochieng Ooko, raised his stake to 12.27 million shares at the end of December, currently valued at Sh85.7 million, from 7.53 million units last June, which was valued at Sh12.5 million.

He is followed by businessman Suresh Naran Ratna Varsani and Wilson Kimeli Maiyo, who hold 12.1 million shares each, valued at Sh84.7 million. Mr Varsani cut his stake from 17.22 million shares in June, while Mr Maiyo raised his stake from 10.36 million shares.

Kenya Power, fellow parastatals KenGen and East Africa Portland Cement Company (EAPCC), I&M Group and Kenya Orchards have been the leading gainers at the NSE over the past 12 months, recording price appreciation of between 100 and 400 percent.

For the parastatals, analysts have largely attributed the gains to improved financial results for the 12 months to June 2024.

“Kenya Power’s turnaround in earnings per share to Sh15.41 in the year to June 2024 from a loss of Sh1.64 the previous year, coupled with its dividend yield of 20 percent at the time its financial results were announced in October, served to unlock the latent value in the share that had hitherto gone unrecognised,” said Ronnie Chokaa, a senior analyst at Capital A Investment Bank.

Kenya Power reported a net profit of Sh30.08 billion for the period from a loss of Sh3.19 billion in 2023, while KenGen’s profit after tax rose by 35.5 percent to Sh6.79 billion. EAPCC made a net profit of Sh1 billion, compared to a loss of Sh1.36 billion in 2023.

KenGen enhanced its dividend to Sh0.60 from Sh0.35 a year earlier while Kenya Power and EAPCC resumed distributions after six and 11 years of dormancy respectively with payouts of Sh0.70 and Sh1 per share.

The shares were also helped by a broad return by investors to the equities market amid falling interest rates on government securities.
The large gains relative to other listed companies were also partly due to the stocks coming off a low nominal price after years of underperformance in the market.

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