Airtel Uganda has taken a decisive stride towards financial expansion by announcing its plans to launch an Initial Public Offering (IPO), with a tantalizing proposal of offering a substantial 20% stake in the company.
This bold move not only signifies Airtel’s confidence in its position within the competitive telecommunications sphere but also underscores the growing allure of public investment in an era defined by rapid technological evolution.
The operator stated that the offer will prioritize Ugandan investors, aiming for a listing by December 16th to meet the National Telecommunications Operator (NTO) license requirements.
Nishant Mohan, the telecommunications Finance Director said the initiative will offer better prospects for the local population to enrich their revenue sources through returns on investments, resulting in the growth of capital markets.
“The offer is expected to result in meaningful local ownership of Airtel Uganda Ltd, with preference to be given to Ugandan investors, and to contribute to the development of the capital markets in Uganda,” Mohan asserted.
“This aligns with our core value of customer-centricity, and we believe the IPO will boost Airtel Uganda’s reputation across the continent,” he added.
After missing the initial deadline last December, Airtel was granted a 12-month extension to list its shares, unlike its competitor MTN Uganda, which completed its share listing in 2021.
Pending approval from the Capital Markets Authority of Uganda, the shares will be available to investors through both traditional channels and the Airtel Money platform.
Absa Bank Uganda has been chosen as Airtel’s lead transaction advisor, with Crested Stocks and Securities Limited acting as the Lead Sponsoring Broker.
Airtel Uganda, present in the East African nation since 1995, holds a 49% revenue share and a 47.3% subscriber market share, making it a co-leader in the market. The company serves 14.3 million active subscribers in Uganda.
Having obtained an NTO License on July 1st 2020, Airtel Uganda can operate and provide telecommunications services in the country until June 30th 2040, with the option of a ten-year renewal.
Originally known as Celtel Uganda Limited, Airtel Uganda introduced the country’s first mobile cellular network in 1995. The company, under Bharti Airtel Limited since June 2010, rebranded and expanded its coverage. Its 3G population coverage has increased to 98.1%.
Airtel Uganda, a subsidiary of Airtel Africa plc listed on the London Stock Exchange, is part of a pan-African business operating in 14 countries, serving over 140 million subscribers and valued at around $5.5 billion.
In terms of financials, Airtel Uganda reported revenues of Shs1.59 trillion, EBITDA of Shs888 billion, and Net Income of Shs326 billion.
The decision to initiate an IPO comes at a time when the telecom industry in Uganda is witnessing a dynamic interplay of innovation, regulation, and consumer demand.
Airtel Uganda, as a significant player in this landscape, appears poised to harness the potential of public capital infusion to further fortify its market presence and accelerate its trajectory of growth and diversification.
Market experts and industry insiders are eagerly examining the implications of this strategic step, as it underscores the shifting tides within the telecom sector.
The move also opens up an avenue for both institutional and individual investors to become active participants in the journey of a telecommunications giant, marking a distinct departure from the conventional norms of industry ownership and engagement.
In a realm where technological advancements are reshaping communication paradigms and reshuffling industry dynamics, Airtel Uganda’s foray into the IPO arena not only redefines its own trajectory but also resonates as a reflection of the broader metamorphosis underway within the telecom market.
As the company embarks on this groundbreaking journey, market players and enthusiasts alike find themselves on the cusp of a new chapter, one that promises to reshape the telecom narrative in Uganda and beyond.
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