MTN Nigeria Set to Launch its Billion-Dollar IPO in Q2

The MTN Group has scored a major point in its quest to list its Nigerian subsidiary on the stock market. The company just received its shareholders’ approval for the process to go through.

Getting regulatory approval for the listing is the next hurdle the company has to face.

Equity report on @MTNNG
By @vetivacapitalhttps://t.co/U2mUuRRSu1

— Olufemi AWOYEMI, mni (@OlufemiAwoyemi) March 27, 2018

Once approved, the company will formally launch its IPO on the Nigerian stock market. The IPO is scheduled to be done in Q2 of 2018 according to Vetiva Research Group. When completed, this would be the first subsidiary of the MTN Group that would trade publicly.

Although the company has not shared its own valuation, the subsidiary has a $5.2 billion speculative valuation. And according to the Group’s latest earnings report, the Nigerian subsidiary accounts for 27% of its earnings – down from 32%. But at ₦885 billion, the subsidiary recorded an 11.6% percent revenue growth from 2016.

MTN Nigeria Listing: A Part of NCC Deal

MTN’s listing on the stock market is not surprising to industry watchers. As previously reported, it is part of a compromise that lowered the ₦1.04 trillion fine slammed on the company by telecom regulator, NCC. The deal forced MTN to commit to listing on the stock market as soon as it was “commercially and legally feasible.”

As a result, the company had previously planned the listing for 2017. But backed out due to the troubles the Nigerian Stock Market faced during over the last 3 years. 2018 appeared to be a much better time for listing than previous periods. Buoyed by a 47% rise in the NSE’s All-Share index over the last couple of months, MTN Nigeria is looking to bounce on the tide.

Analyst are optimistic the listing would be very beneficial to the Nigerian economy. According to Ifedayo Olowoporoku of Vetiva Capital Managemen, MTN’s global recognition would help make the Nigerian listing a blue-chip company.

Additionally, it would give confidence to foreign listings in the Nigerian stock market. Analysts estimate that once listed, MTN Nigeria could account for 13% of the NSE market cap.