Airtel Uganda relied heavily on the country’s pension fund and retail investors to raise Sh8.5 billion in its recently concluded initial public offering (IPO).
Most of the funds came from Uganda’s National Social Security Fund (NSSF), which acquired 4.2 billion shares, giving it a 10.55 percent stake in the telco. In the IPO, which was undersubscribed, individual investors acquired a total of 136 million shares amounting to a 0.34 percent stake in the company. Their stake, including incentive shares they were allotted for free, is valued at about Sh547 million.
The pension fund helped the IPO hit a 54.45 percent performance mark as most institutional investors snubbed the deal in which the telco sold shares at Ush (Sh4) each.
Those who participated in the transaction were also offered free shares subject to certain order volumes, with the extra stock forming part of 20 percent stake that Airtel Africa wanted to cede in the Ugandan subsidiary. “The National Social Security Fund … Supported the IPO with a USh199 billion (Sh8 billion) investment for 10.55 percent of the total shares outstanding of Airtel Uganda,” reads a statement announcing the IPO results.
“Following the offer, professional investors will hold 10.55 percent of the total shares outstanding of Airtel Uganda, with retail investors holding 0.34 percent.”
The IPO struggled to attract investors, prompting the pension fund to expand its support. The incentive shares were also increased to make the offer more attractive.
The free shares, for instance, were doubled from five to 10 for each 100 shares applied for by a retail investor buying more than 2,500 units.
Airtel Uganda becomes the latest telco to go public in the regional exchanges, joining MTN Uganda which is also listed on the Uganda Securities Exchange (USE). Earlier listings were Safaricom on the Nairobi Securities Exchange and Vodacom Tanzania Ltd on the Dar es Salaam Stock Exchange.
