Some stockbrokers have described the listing by the introduction of Geregu Power Plc on the Main Board of The Exchange on Wednesday, 5 October 2022 as a good step that will increase the efficiency and capital base of the company.
A total of 2.5 billion ordinary shares of Geregu were listed at N100 per share, under the Utilities sector and Electric Power Generation sub-sector of NGX.
Geregu Power, a leading power generation company (GenCo) in Nigeria, is the first GenCo to be listed on the NGX Main Board, a listing segment for well-established companies with demonstrable records of accomplishments. The listing of Geregu’s shares has added N250 billion to the market capitalization of NGX, further boosting liquidity in the Nigerian capital market and providing opportunities for wealth creation.
What the operators are saying
Mr. David Adonri, executive vice chairman, Hicap Securities Limited in a chat with Nairametrics said the listing is a right step in the right direction for the electricity industry.
It is better that all of the GenCos lists on the Exchange, when the federal government was privatizing them, it should have been done in the capital market where all of them would assess adequate funding.
The government is still holding the transmission segment and between GenCos and DisCos is the transmission. Without privatization of the entire value chain, the inefficiency of the sector is likely to continue. This is because any economic venture in which the Nigerian government is involved will be generally characterized by corruption and nepotism, which will lead to inefficiency and failure of the economic venture.
If Geregu is owned by Femi Otedola, I don’t have a lot of confidence in the capacity of his enterprise to meet the expectation of investors in the long run considering how the expectations in Forte Oil were dashed, and the company was sponsored by him. Except it is a different narrative he is bringing to the table that will be different from Forte Oil, otherwise, investors ‘confidence in Geregu will be low.
Speaking in the same vein, Mr. Eugene Ezenwa, a consultant on capital market activities said the listing will bring a high level of efficiency because the eyes of investors will be on the company. Their capital base will also increase instead of relying on foreign loans or government subvention.
The capital market is there for all of them to list but unfortunately, some of them chose to depend on government support. Maybe because dividend investors will demand regulation, some of them shy away from the capital market. When a company accesses the capital markets both local and foreign investors will have more confidence in the company. The Exchange needs to increase the number of listed companies to grow its market capitlisation and for investors to expect more dividends and the right issues.
Government business is no business . It is usually the hartchery for corruption .