By Rebecca Ellis
THUR, MAY 24 2018-theG&BJournal-MTN is launching an IPO which is 10 times bigger than the country’s largest IPO to date. The MTN Group is offering 30% of its Nigerian business to be floated on the NSE. The Group will retain control of 70% of the company. The eagerly awaited IPO has been under much speculations as the Nigeria Stock Exchange has been starved for IPOs recently. This IPO could boost the NSE by up to USD 10 billion.
MTN Nigeria is the largest subsidiary of MTN Group, a multinational telecommunications group, offers cellular network access to over 223 million subscribers in 22 countries in emerging markets. As of 2017, MTN had a total of 52.3 million subscribers. MTN Nigeria is the second largest contributor to MTN Group revenue of about 27.2 % closely behind South Africa which contributes 32.2%.
The leading players in the Nigerian telecom space are MTN with a present market share of 36.6% closely followed by Globalcom, an indigenous multinational firm with a market share of 26.2% and Airtel, an Indian telecom firm, with a market share of 26.2% and 9mobile trails behind with a market share of 11%.
MTN Nigeria’s key product includes:
- Voice data (incoming and outgoing calls)
- Data services (internet service, mobile internet mobile Wi-Fi services); and digital (enabling people to make financial transactions using their cell phones, and bringing them entertainment and online shopping through investments in mobile platforms, apps and online ventures business)
- In the FY’17, data revenue grew by a robust 86.6 per cent.
The Telecoms Sector
Comparing telecommunication companies in various emerging market including Vodacom in South Africa, Safaricom in Kenya, Bharti Airtel in India, PLDT Inc., in the Philippines and Total Access Management in Thailand, the industry average using price to cash flow (P/CF) is 9.9x, price to sales (P/S) 2.9x, price to earnings 47.6x, price to book (P/B) 5.2x, and EV/EBITDA 9x.
MTN Nigeria is expected to achieve double-digit growth in the coming years and the IPO is set to be highly successful with major demand from Pension Funds, global fund managers, domestic investment firms and institutional investors looking for exposure to the last of its kind pure-play emerging markets Telecommunications firm with a dominant position in a large country 200 million people and GDP of USD400 bn.
THE IPS OFFER STATUS
The company has completed the appointment of professional parties and is currently awaiting approvals from the regulators. The expected IPO is scheduled for June or July. The Draft Accountant Report is being reviewed by parties to the offer with the proposed offer size: N252,000,000,000 (USD700 million). They will issue Existing Issued and fully paid share of 402,590,263 units.
PRICING
The IPO price will be set via book building. The bid range is seen by bookmakers to represents a fair value for the ordinary shares of the company as soon as the offer becomes public.
If you are interested in getting involved, click on the button below and we will call you to show you how.
Rebecca Ellis is a Personal investment advisor, based in Zurich| REBECCA.ELLIS@POMOMAWEALTH.COM|PASCAL.CREPIN@POMONAWEALTH.COM
A regular contributor to theG&BJournal
