Airtel Uganda, a subsidiary of Bharti Airtel Group, is launching an initial public offering (IPO) of its shares on the Uganda Securities Exchange. The IPO will offer the public a 20% stake, or 8 billion shares, in the company to fulfill a regulatory requirement set by the government. The offer opens on August 30, 2023, and closes on October 13, 2023.
In this article, we delve into the Airtel Uganda IPO and its shares, providing a comprehensive understanding of what’s happening in the Ugandan telecommunications sector.
Airtel IPO Offer Duration: When Can You Invest?
The offer for Airtel Uganda shares opens on Wednesday, October 6, and closes on October 13. The company will start trading on the exchange on October 31.
This information comes from a prospectus released on Tuesday. Uganda’s efforts to enhance local shareholding and strengthen its capital markets have led to a requirement for telecommunications companies to make at least 20% of their bourse available for sale. Achieving its IPO target would position Airtel Uganda as the country’s largest company by market value.
What Is on the Offer
Airtel Uganda is extending an invitation to the public to acquire a stake in the company through the issuance of 8 billion ordinary shares. The cost of a single share is UGX 100. To participate, you’ll need to apply for a minimum of 2,500 shares, which amounts to 250,000 UGX. Applications for the Airtel shares are in batches of 500 each and there’s no upper limit on the number of shares you can apply for, although certain restrictions might apply due to the daily transaction limits of Airtel Money.
Additionally, Airtel Uganda boasts an appealing dividend policy, having maintained an average payout ratio of 87% over the past five years. This stands in contrast to MTN Uganda’s payout ratio of 56% at the time of its listing.
What Is the Allotment Process
The allocation policy for this IPO guarantees that Ugandan retail and Professional Investors investors will be considered first if the offer is oversubscribed. This means that if there are more applications than available shares, individual and professional investors from Uganda will be given priority.
How Do You Apply for Airtel Uganda Shares
To apply for Airtel Uganda shares, you will need to have a Securities Central Depository (SCD) account. Airtel customers with a valid Ugandan National Identity Number (NIN) can apply for shares via the m-IPO platform.
Here are the steps involved:
- Dial *185*85#
- Select option 2, “Airtel IPO purchase”
- Enter a valid National Identification Number (“NIN”)
- Input the number of shares to apply for
- Select broker
- Enter PIN to confirm the application
- SMS received confirming application and detail
Is Airtel Money Business Included in the IPO?
The Airtel Money business is not included in the initial public offering (IPO) of Airtel Uganda. The IPO only includes Airtel’s products and services division, which provides voice bundles, internet services, USSD, SMS, one network, and sales of SIM cards.
What is an SCD Account
A Securities Central Depository (SCD) is a legal entity that maintains records of ownership of shares. Anyone who wants to buy shares in a listed company must have an SCD account because shares cannot be held in physical form.
How to Open an SCD Account
You can open an SCD account for free via MTN Momo by dialing *185*85# and following the prompts, or via the Uganda Securities Exchange Easy Portal: https://scd.use.or.ug/. Once your application is successful, you will receive a notification (via SMS) of your SCD account details.
Airtel Uganda is offering special incentives for all Ugandan individuals (retail investors) who buy Airtel shares. They are giving 5 incentive bonus shares for every 100 shares allocated, and 1 additional share if they apply through the m-IPO platform. In addition, larger retail applications can receive up to 20 incentive shares for every 100 shares allocated.