Airtel Uganda has opened up share sale to the public as it plans to raise 800 billion shillings at 100 shillings per share.
It becomes the second telecoms operator to float its shares to the public after MTN Uganda about two years ago.
This completes the requirement of listing at least 20 percent of the Company’s total stock onto the Uganda Securities Exchange, as per the National Telecommunication Operator’s license acquired in 2021.
At the launch of the Initial Public Offer prospective in Kampala, Airtel Uganda Managing Director Manoj Murali said that the offer of 8 billion shares takes immediate effect until October 13.
The licensing guidelines that provided to the public offer of shares was partly aimed allowing ordinary Ugandans, who are the main customers, to share in the profits of the multinationals and have a say in their decisions.
The minimum number of shares one can purchase is 2,500, meaning that one will need at least 250,000 shillings to apply for the shares. To ensure that more Ugandans participate in the exercise, the company has offered an extra five shares free for every 100 purchased.
The company’s Board Chairman Hannington Karuhanga said this is mainly aimed at encouraging, mainly, the retail investors to apply.
The MTN IPO was undersubscribed by about 35 percent as the company had to deal with an economy emerging from the devastating global effects of the Covid-19 pandemic and the high global inflation.
Asked for his opinion of Airtel opportunities, Keith Kalyegira, the Chief Executive Officer, Capital Markets Authority, said the companies and the market as a whole have been studying the behavior of the equity investors in the region.
He is sure that there are lessons learnt and that this will help in the success of the IPO.
Airtel becomes the 11th company to be listed on the Uganda Securities Exchange and will bring the total local market capitalisation to 11.5 trillion shillings from the current 6 trillion.
Airtel Uganda and its sister company, Airtel Mobile Commerce Uganda Ltd, are subsidiaries of Airtel Africa owned by India’s Bharti Airtel.
Airtel Uganda is a broadband, data and telecommunications company. Airtel’s listing comes as a big boost to the Ugandan stock market as it increases the value of listed equities by more than a half, though it comes at a time when many see the local and global economy still recovering.
However, Paul Bwiso, USE CEO says the market has been doing well despite the recent global shocks, with some equities realising rising share prices and returns on Investments.
The regulator, Uganda Commutations Commission Legal Affairs Director, Susan Wegoye hailed the company as compliant to the regulations and decent.
She gave her assurance to prospective investors that Airtel will stay in Uganda and continue to grow, considering that the licence cost them more than 250 billion shillings and will run for 20 years and is renewable.
Airtel Uganda expects to pay dividends of 500 billion shillings this year, in line with its own policy of giving out 95 percent of profit after tax. The company made a pretax profit of 474 billion shillings last year which was a drop from the 565 billion the previous year.