Bharti Airtel Ltd.’s Africa unit fell in its London trading debut after raising about $750 million in an initial public offering to help the India-based wireless operator pare debt.
Airtel Africa Ltd. dropped 13% to 70 pence per share as of 8.13am in London, from an offer price of 80 pence a share, at the low end of the company’s range. The offer gave Airtel Africa a market capitalisation of about 3.1 billion pounds ($3.93 billion), according to a statement from the company on Friday.
The soft trading debut for the African carrier, the continent’s second-largest by subscribers, comes as parent Bharti Airtel struggles in India with a years-long price war and mounting debt. Along with rivals Vodafone Idea Ltd. and Reliance Jio Infocomm Ltd., Bharti is also preparing to upgrade to a fifth-generation network, a step that could cost the industry as much as $70 billion, the country’s regulator estimates.
Bharti’s Airtel Africa sale joins Volkswagen AG in pricing IPOs at the low end of a target range for listings that both started trading on Friday. Volkswagen raised $1.8 billion through the IPO of its truck unit, Traton. Low interest rates have helped keep up demand on stock markets, and many other companies that have proceeded did well.
Raghunath Mandava, CEO of Airtel Africa, 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 Plc raised 1.1 billion pounds 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 Pte and SoftBank Group Corp. and the company has said it’s also planning to pursue a local secondary listing in Nigeria.
(With assistance from Swetha Gopinath and Dave McCombs.)