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MTN IPO undersubscribed
The MTN IPO was expected to double the size of the Uganda Securities Exchange from Shs4.2 trillion to Shs8 trillion. Photo | File
What you need to know:
- The IPO, which had floated 4.5 billion shares, was launched on October 11 as part of a license requirement that made it compulsory for MTN, one of Uganda’s most profitable companies, to open up part of its shareholding to Ugandans.
MTN is today expected to list on the Uganda Securities Exchange (USE) after completing allotment of shares from the Initial Public Offering (IPO) that closed on November 22.
The IPO, which had floated 4.5 billion shares, was launched on October 11 as part of a license requirement that made it compulsory for MTN, one of Uganda’s most profitable companies, to open up part of its shareholding to Ugandans.
The law, under the National Broadband Policy, requires all telecoms to list at least 20 per cent of their shares on the Uganda Securities Exchange.
According to a report released at the weekend, SBG Securities, the transaction adviser and lead sponsoring broker, indicated the IPO had retuned 2.9 billion shares out of the 4.5 billion that had been on offer.
The 2.9 billion share return indicates an undersubscription but was, however, above the 25 percent threshold or approximately 1.1 billion shares, which is the acceptable performance by Capital Markets Authority. It is the first time an IPO has under performed in the history of the USE since it was established in 1997.
However, the IPO mobilised the largest amount of capital in the history USE, realising Shs532b. It has also been a major boost to Uganda’s equity markets, increasing both the number of investors on the USE and Securities Central Depository (SCD) accounts.
In a statement released at the weekend, Mr Paul Bwiso, the USE chief executive officer, indicated that 21,394 investors had participated in the IPO, of which 20,894 were Ugandans. “During this period [October 11 to November 22] over 74,000 SCD accounts were opened .. . growing the number of SCD accounts from approximately 38,000 pre-IPO to 113,421,” he said.
Mr Bwiso also indicated that the Shs532b that had been raised during the IPO was at least 59.78 percent of the targeted amount and was the largest amount of capital raised through the USE via an IPO or singular secondary market offer since its inception
In its statement, SBG indicated that National Social Security Fund (NSSF) had become MTN’s second largest shareholder with a stake of 8.84 percent. MTN International (Mauritius) remains the largest shareholders with a stake of 83.05 percent.
NSSF is followed by Charles Mbire with a 3.99 percent stake, NSSF - Sanlam (0.26 percent), Bank of Uganda Defined Benefits Scheme - Sanlam (0.19 percent) National Social Security Fund (Kenya) - Sanlam (0.18 percent) and Duet Africa Opportunities Master Fund (0.13 percent).
Others are Hermes Oman LLC (0.12 percent), First Rand Bank (0.10 percent) Uganda Revenue Authority Staff Benefit Scheme - Sanlam (0.08 percent) and other shareholders (3.06 per cent).
On October 11, MTN floated 4.5 billion shares with a par value of Shs1 at an offer price of Shs200 each.
