Interswitch is reviving its plans for an initial public offering, IPO, via a dual listing on the Nigerian Stock Exchange and London Stock Exchange according to reports from Bloomberg. The market listing of its shares is expected later this year.
Source: Bloomberg reports Interswitch has hired financial advisers, JPMorgan Chase & Co, and Standard Bank Group as firms working on the potential initial public offering. Firms typically hire financial advisers when they decide to list on the stock market to help with valuation, marketing of the offer, compliance with listing rules and other regulatory filings.
Flashback: In 2015, Interswitch announced plans for a dual listing on the Nigerian Stock Exchange and London Stock Exchange, a move that would have made it the second Nigerian company, after Seplat to have a dual listing.
- However, the ensuing exchange crisis affected the company’s plans resulting in the listing being suspended.
- Interswitch planned to list in the summer of 2017 but canceled the plans in December 2016 due to exchange rate crisis.
- Foreign investors who they were targeting for the listing developed cold feet following the currency crisis making it difficult for the company to proceed.
- Had they gone on to list, they may not have been able to raise significant capital from Nigeria.
Listing Pans reignited: In August 2017, Nairametrics had a tweet chat with the CEO of Interswitch, Mitchell Alegbe where he mentioned that plans to list the company shares were still on the table.
- Bloomberg’s latest report confirms that the listing is indeed back on the table and set for later this year.
- The company could be valued at between $1.3 billion to $1.5 billion.
- Interswitch is owned 70% by London based private equity group, Helios Investment Partners LLP. Other shareholders include South Africa’s Adlevo Capital Managers LLC and the International Finance Corp., a unit of the World Bank.
- Helios bought 52% of Interswitch for $96 million in Dec. 2010, valuing the company at about $184.6million back then.
- Going by the suggested valuation of $1.5 billion, Helios Partners investments in Interswitch should be up 8x or 700%.
What this means for the NSE: If consummated, this will be the third major listing on the Nigerian Stock Exchange this year, unprecedented in terms of record valuation.
- MTN listed earlier in May, followed by Airtel increasing the market capitalization of the Nigerian Stock Exchange by about N3 trillion.
- Interswitch is considered Nigeria’s first unicorn in the FinTech space and has dominated Nigeria’s payment channels gateway for over a decade.
- In partnership with banks, Interswitch has facilitated tens of billions in transactions volume in Nigeria and operates almost in a monopoly.
- Recently, more FinTech firms like Flutterwave and Paystack are playing increasing roles in facilitating online payments in Nigeria. While they compete with Interswitch, they still operate as Friendnemies, partnering in several other ways.
- This listing could also pave the way for the future listing of these newer companies.
