Kenya Pipeline Company (KPC) has promised investors a dividend payout of 50 percent of net profits as it prepares to list on the Nairobi bourse, signalling an effort to position the State-owned fuel transporter as an income-generating stock.
The dividend commitment is outlined in the company’s disclosures to investors ahead of the initial public offering (IPO) that will see the firm listed on the Nairobi Securities Exchange (NSE), raising Sh106.31 billion for the government, which is selling a 65 percent stake.
KPC says the 50 percent payout will be declared and paid, subject to the availability of distributable reserves and adequate liquidity. The payment will also be in compliance with applicable funding covenants, statutory requirements and regulatory approvals.
“Subject to these considerations, the company commits to distributing fifty per cent of its net earnings as dividends,” says KPC in the information memorandum.
The pledge, which will position it among generous dividend payers on NSE, is expected to appeal to yield-seeking investors. However, the payout is lower than the distribution it has been making to the National Treasury as a State corporation.
The firm reckons that retail investors in the Kenyan equities market are predominantly income-driven and place “significant” emphasis on companies with a demonstrated ability to deliver sustainable and growing dividend payouts.
“Accordingly, a clear, robust and transparent dividend policy is a key management tool in sustaining investor confidence and preserving the viability of equity markets as a long-term source of capital for optimal capital budgeting. The company intends to adopt a sustainable and progressive dividend policy,” said the firm.
KPC has been making payouts to the government, including in the year ended June 2025, when it paid out Sh5.9 billion or 78.8 percent of its Sh7.49 billion net profit as dividends to the State. In the previous year, the firm paid the State Sh7 billion or 94.5 percent of Sh7.41 billion net earnings.
KPC, which operates the country’s fuel pipeline network, has in recent years emerged as one of the most profitable State corporations, boosted by rising fuel consumption, efficiency gains and stable tariff revenues.
The firm has consistently reported multi-billion-shilling profits, strengthening the case for a public listing. The planned IPO is part of the government’s broader privatisation agenda aimed at raising capital, deepening the NSE and reducing reliance on public borrowing.
Under the proposal, the State is seeking to offload 11.81 billion KPC shares at a price of Sh9 per unit. The IPO opened on Monday and will close on February 19, 2026.
A generous dividend policy is seen as a key selling point for the offering in a market where several recent listings have struggled to deliver immediate returns.
KPC’s business model is anchored on regulated tariffs charged to oil marketers for transporting fuel from the port of Mombasa to inland depots, including Nairobi, Eldoret and Kisumu.
The firm has enjoyed increased demand for its services in line with steady growth in petroleum consumption in the country and regional transit volumes.
However, KPC also faces key capital expenditure requirements as it expands storage capacity, upgrades aging infrastructure and invests in new pipelines. Management has indicated that dividend payments will be balanced against the need to fund long-term investments and sustain operations.
