Airtel Africa shares fall in first trading

Airtel Africa shares fall in first trading

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Shares in Airtel Africa dropped sharply on Friday in a disappointing debut for the SoftBank-backed company, which had priced its initial offering at a valuation below that secured in two recent private funding rounds.

The stock fell as much as 15 per cent to 68p after Africa’s second-largest mobile operator listed on the London Stock Exchange, knocking £500m off its opening valuation to give it a market capitalisation of around £2.6bn.

Airtel Africa — which operates a telecoms and mobile money business across 14 African countries — raised £595m through the offer, which took place concurrently on the London and Nigerian exchanges and represented 19 per cent of its total stock.

The African subsidiary of Indian telecoms giant Bharti Airtel had priced its shares at 80p, at the bottom of its previously announced 80-100p price range.

This valued it at around £3.1bn, already significantly below the valuations implied by earlier funding rounds.

In October, it secured $1.25bn from a consortium of investors including private equity house Warburg Pincus, Singapore’s Temasek, SoftBank and Singapore Telecommunications at a valuation of around $4.4bn.

A $200m investment by the Qatar Investment Authority earlier this year put its valuation closer to $5bn.

The group’s London listing comes as foreign issuers have propped up a nervous UK IPO market.

Raghunath Mandava, Airtel’s chief executive, said he was “delighted by the strong response” the offering had received.

Airtel Africa has nearly 99 million customers and operations in 14 countries in the continent. In a statement Friday, the company said its London IPO was oversubscribed with strong interest from reputed global investors across the UK, US, Africa, Europe, Middle East and Asia.

Airtel Africa chairman Sunil Mittal said the strong support that the company has received from institutional investors “demonstrates the attractive investment proposition” it offers the market.

“Since first investing in Africa almost nine years ago, we have leveraged our expertise in emerging markets to deliver on a clearly defined strategy to build Airtel Africa into a market-leading mobile service provider, increasingly expanding beyond voice into data services and Airtel Money,” Mittal, who is also Bharti Airtel chairman, said in the statement.

Chief executive Raghunath Mandava added that Airtel Africa is the first telco to “simultaneously list on the premium segment of the London and Nigerian stock exchanges through an IPO”.

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