Airtel extends IPO offer period by two weeks
The IPO will now close on October 27. Photo / File
What you need to know:
- The offer had been scheduled to close today, but sources familiar with the matter said it had not realised targeted subscription, thus the extension
Airtel has extended its initial public offering (IPO) offer period by 14 days, citing an increase in subscriptions, a day to scheduled closure.
The offer had been scheduled to close today, but sources familiar with the matter said it had not realised targeted subscription, thus the extension.
Monitor could not independently verify the claim. However, Mr David Birungi, the Airtel public relations manager, said the extension had been informed by an influx of retail investors in the last few days of the IPO.
“We did not want to lock out any investor. So many people have been opening accounts in the last days. Thus we opted to extend [the offer] date to October 27,” he said, noting that Capital Markets Authority (CMA) had already approved the extension.
CMA declined to comment on the specifics of the extension. In August, Airtel floated eight billion shares at an offer price of Shs100.
The extension, analysts that asked to remain anonymous to comment freely, said could have been due to market dynamics, given that the telecom had floated the offer at a time of slow market activity, worsened by rising inflation and depreciation of the shilling.
The IPO had come after a delay of year, in which Airtel had asked for an extension, due to an unfavorable economic environment.
Airtel is the 10th local company to float shares in fulfilment of licensing conditions under the National Broadband Policy that require telecoms to sell a 20 percent stake to Ugandans.
The USE currently has nine local listings, including MTN, the first telecom to list in 2021, and eight cross-listings.
USE listing rules require that immediately after the offer, at least 20 percent of shares shall be held by not less than 500 shareholders, excluding any employees and directors of the company.
It was not immediately clear whether Airtel had met the threshold, but analysts have indicated that the IPO has has had muted activity due to low sensitisation, worsened by a volatile economic environment that has seen declines in stock values from IPO prices.
Fall in IPO prices
Cipla has experienced one of the largest declines in share price, with the IPO price falling from Shs256.5 to Shs65, while that of MTN has declined from Shs200 to Shs170.
However, Airtel has previously indicated that its performance and the 95 percent dividend policy were sufficient ingredients that would attract investors to invest into its stock.
