Airtel Uganda Limited has officially announced its plan to go public by listing up to 20 percent of its shares, amounting to a total of 8 billion shares, on the stock market of Uganda.
This move is expected to provide new opportunities for investors and potentially reshape the telecommunications landscape in Uganda.
As a subsidiary wholly owned by Airtel Africa PLC, the company is set to release a prospectus, or an offer document, that has been approved by the Capital Markets Authority. This crucial step will pave the way for their Initial Public Offering (IPO).
This decision aligns with the terms and conditions outlined in the National Telecommunications Operator’s (NTO) License granted to Airtel in 2020. This licensing followed newly established guidelines by the Uganda Communications Commission (UCC).
Nishant Mohan, the Finance Director of Airtel, has disclosed that the anticipated IPO is expected to be executed by the 16th of December this year. Notably, the IPO will offer preferential treatment to Ugandans, aiming to include local investors in the company’s ownership.
In the year 2020, the UCC issued new directives for National Telecommunications Operators’ licenses under the Uganda Communications (Licensing) Regulations of 2019. Subsequently, the Uganda Communications (Fees and Fines) (Amendment) Regulations of 2020 further clarified these guidelines.
Among these provisions was the requirement for NTOs to offer at least 20 percent of their shares to the public, contributing to both corporate governance and the national economy.
Airtel Uganda is now positioned as the second company to undergo the IPO process under these revised regulations and guidelines. The company faced a delay in meeting the 60-day deadline for listing after receiving the NTO license.
Manoj Murali, the Managing Director of Airtel Uganda, has acknowledged certain limitations imposed by capital markets regulations on divulging comprehensive information to the public. Nonetheless, the company maintains confidence in the market’s reception of their IPO.
In December 2021, MTN Uganda pioneered this movement when it offered 22.5 billion shares through an IPO. However, the campaign faced challenges, with a 36 percent undersubscription rate. This shortfall was attributed partly to a negative campaign on social media, which negatively impacted the willingness of Ugandans, particularly the youth, to invest in the shares.
Hannington Karuhanga, Chairman of the Airtel Board, has encouraged Ugandans, especially the youth, to diversify their savings by considering equity investments.
He emphasizes the significance of local investors’ involvement in the stock market, contributing to both the country’s economic development and reduced reliance on foreign investors.
With its eyes firmly fixed on expansion and growth, Airtel Uganda’s decision to go public signals not only a vote of confidence in its own trajectory but also a potential game-changer for the region’s economic landscape.
As the company prepares to navigate the complexities of a stock market listing, industry observers are closely watching the developments, anticipating the ripple effects this move might have on both the telecommunications sector and the broader investment landscape within Uganda and beyond.
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