Airtel Uganda, the telecommunications company, has pushed back the closing date for its initial public offering to 27 October from the original date of 13 October. Trading in the company’s shares will, as a result, start on 7 November instead of 31 October, the company said on Friday.
The company said that the Shs100 per share offer price and available stock will remain unchanged.
Airtel is offering eight billion shares, corresponding to 20 per cent of its total shares, on the Uganda Securities Exchange. It seeks to raise as much as Shs800 billion in the flotation, which would value the company at Shs4 trillion.
Airtel did not give a reason for the decision. However, a banker familiar with the matter told this website it was due to poor investor response. The IPO opened for subscription on 30 August.
The last IPO on the local bourse – that of Airtel’s rival, MTN Uganda – was heavily under-subscribed. MTN listed a similar stake in its local business, seeking to raise Shs900bn, but only sold 60 per cent of the total issue, raising Shs536bn. It started trading on the USE in December 2021.
Initially priced at Shs200, MTN shares peaked at Shs206 on the first day of trading. However, the stock has since fallen and is currently trading at Shs170 per share, giving the company a market valuation of Shs3.8tn ($1bn).
Airtel Uganda’s IPO offer price values the company at around 12.5 times its net profit for the year ending December 2022. MTN Uganda, on the other hand, trades at 9.2 times reported earnings for the same period.
