Airtel Africa London Stock Exchange debut lacklustre, stock falls 15%

Airtel Africa made a lacklustre debut on the London Stock Exchange (LSE) on Friday, knocking almost £400 million off its opening valuation.

The shares fell sharply upon what may be a disappointing debut for one of the largest initial public offers (IPOs) announced in London in 2019, falling as much as 15 per cent to 68 pence. In India, Bharti Airtel’s stock ended at Rs 346.7 a piece on the BSE on Friday, down 0.3 per cent. 

The market capitalisation of Airtel Africa stood at £2.6 billion at 5:30 pm (IST) when the stock price was 68 pence apiece. Bharti Airtel’s African subsidiary had priced its shares at 80 pence at the bottom end of its 80-100 pence price range, which valued the company at £3.06 billion. 

A Mumbai-based analyst noted that the poor debut is because of the market conditions in the UK. “European IPOs have been lacklustre this year, and that is perhaps why the Airtel Africa debut is also muted,” he said. 

Airtel Africa operates across 14 African countries and has over 100 million customers. Nigeria contributes over 35 per cent to its revenues. It had raised £595 million (or over Rs 5,200 crore) through the offer that was oversubscribed and saw interest from global investors. 

Moreover, the IPO comes with a secondary listing on the Nigeria Stock Exchange. 

Airtel Africa Chief Executive Officer Raghunath Mandava said the IPO was a “proud moment,” in the company’s statement. 

“We are delighted by the strong response we have received from the many high-quality investors from around the world,” he said.

The Airtel Africa sale is among the largest IPOs announced in 2019 in London, where emerging markets companies are boosting volumes amid a lackluster year for domestic sales. Middle Eastern payments processor Network International Holdings raised £1.1 billion last month in the largest London IPO this year. Finablr, the currency-exchange firm controlled by an 

Abu Dhabi-based billionaire, also debuted last month after slashing the price on low investor demand.

Airtel Africa already raised $1.25 billion last year from investors, including Temasek Holdings and SoftBank Group. The company has said it’s also planning to pursue a local secondary listing in Nigeria.

Earlier, Airtel Africa had secured $1.25-billion funding from a consortium of investors, including Warburg Pincus, Temasek, SoftBank, and Singapore Telecommunications, at a valuation of around $4.4 billion. 

(With inputs from Bloomberg)