Today June 28th, Airtel Africa will officially announce its exact share price and other details pertaining to its July 4th listing on the Nigerian Stock Exchange (NSE).
Prior to this time, the company’s stock had been speculated by analysts to fall anywhere between N363 and N454 per share for the NSE listing, and between 80 and 100 pence for the London Stock Exchange (LSE) listing.
Later today, investors and the general public will now have access to all the listing information, including the precise total number of shares that will be listed. The telco is hoping to raise capital in the region of $646.8 million (N232 billion) simultaneously on the NSE and the (LSE).
Earlier Developments: Airtel began its book-building process on the floors of the NSE and LSE two days ago. Today’s session on the NSE marks a crucial stage in the process as it will help determine the price at which its Initial Public Offering (IPO) will be offered based on investors’ demand for shares. This will ultimately guide the company and the market on how to arrive at an issue price that satisfies both parties.
The book-building will also enable Airtel to gauge the level of interest and confidence investors have in it, according to Rotimi Fakayejo, a capital market expert.
“The company wants to size up ahead of time the success of the offer and what kind of valuation people are placing on the company. When they see different offers, they will look at a threshold whereby anyone below it will not be able to buy the shares. This is just to test the heartbeat of the market in terms of pricing and demand.”
In the meantime, indications of interest in the company’s shares by investors prior to the commencement of the IPO had soared to as high as $200 million according to one of the book-runners handling Airtel’s IPO. As of yesterday, the figure had risen further by $100 million.
About Initial Public Offering (IPO): An IPO is a process by which a company (often a private corporation) offers its shares for sale to the public for the first time. The process is aimed at raising capital for the company and the activity typically marks a transition of the company from a private to a public one.
About Bookbuilding: Bookbuilding refers to the process whereby an underwriter attempts to decide the price at will which a company’s IPO will be offered. The underwriter, usually an investment bank, achieves this by inviting institutional investors to submit bids for the number of shares and the price they will be willing to pay for them.