The Nigerian Stock Exchange (NSE) has explained the reason why Airtel Africa was issued a waiver despite not meeting the shareholders’ requirement needed to list for an Initial Public Offering (IPO) on Nigeria’s bourse. The listing holds July 5, 2019.

Airtel Africa had announced plans to list its shares on the stock exchange, but the company couldn’t gather the needed 300 shareholders mandatory for any company looking to list on NSE. Airtel was only able to pull 130 shareholders. This prompted the NSE to waive the requirement for the company.

[READ ALSO: Airtel Africa has announced its listing price on the NSE]

While addressing issues relating to the waiver at a pre-listing media briefing which Nairametrics was part of earlier today, NSE said it had to grant the waiver due to the peculiarities surrounding the offer. Airtel’s is targetting high net worth individuals and institutional investors.

Airtel had previously listed on the London Stock Exchange (LSE), closing its first day of trading in disappointment. The listing exercise was one of the worst debuts of stocks in the international market this year, as the company’s share price slumped steeply by 16% on its first day of trading despite offering shares below its valuation.

NSE addresses its waiver to Airtel Africa listing, Airtel Africa fails to meet shareholders' requirement, Nigerian Stock Exchange
Airtel Africa’s parent company, Bharti Airtel

The reason why Airtel Africa failed to meet shareholders’ requirement was linked to the company’s route to market, which at this initial stage will focus on the following investors.

  • Qualified institutional investors
  • High-end individuals

During the media chat, NSE said Airtel Africa had met the free-floating requirement for cross-border secondary listing which was rated at 10%, with the network operator accounting for 25%. But despite waiving Airtel Africa to list, NSE described the IPO as below listing standard (BLS).

[READ ALSO: Why Airtel’s IPO is not for you]

FCMB ads 300 x 250

Why NSE gave Airtel the all-clear: NSE says its rule gives the stock exchange regulators the power to waive such requirement for a company that has the ability to meet up with the numbers in a certain period. The Exchange believes Airtel’s inability to meet listing requirement is not a significant risk and will eventually meet up “in the nearest future”.

Deal book 300 x 250

Airtel required about 300 shareholders to meet minimum listing requirements.

Standard chartered
NSE addresses its waiver to Airtel Africa listing, Airtel Africa fails to meet shareholders' requirement, Nigerian Stock Exchange
Raghunath Mandava, CEO Airtel Africa

However, the NSE disclosed that companies which do not eventually meet this requirement will be classified ‘below listing standard and a CSI code’ which is like the ‘buyer beware mark’.

NSE doesn’t have total control on Airtel: When the telecommunications company finally list Monday, it will not be subjected to total regulatory rules of the NSE because it has been listed on the London Stock Exchange.

[READ ALSO: Airtel, Telkom consolidate to battle Kenya’s largest telecoms company]

Meanwhile, Airtel Africa chose to list in Nigeria ahead of 13 other countries, including South Africa. The company had been weighing options between the Johannesburg Stock Exchange and NSE when it decided to go public, but the Bharti Airtel subsidiary settled for Nigeria.

What you need to know: Airtel’s IPO is a Cross border secondary listing because the company has initially listed on another bourse which is the LSE. Airtel Africa will be listed on the main board but eyeing the Premium Board of the NSE.


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