The Standard Bank Group has advised the leading Malawian telecoms company, Airtel Malawi, on its successful initial public offering (“IPO” or the “Offering”) on the Malawi Stock Exchange.
The Offering raised 27.92 billion Malawian Kwacha (MWK), or US$38.1 million, for major shareholder, Airtel Africa plc.
Airtel Malawi closed its IPO on 31 January with shares admitted for trading on 24 February. The IPO was priced at MKW12.69 per share with shares performing strongly on admission, trading up 39.5% on the first day of trading, closing at MKW17.71.
Standard Bank Group acted as the Lead Transaction Advisor, Transfer Secretary and Receiving Bank on the transaction.
This is the 17th IPO and largest yet on the Malawi Stock Exchange, since its inception in 1994, and its successful close allows Airtel to comply with the conditions of Malawi’s Communications Act of 2016 and its licence, which requires a minimum 20% Malawian shareholding.
It also represents a further equity capital markets success for its parent company, Airtel Africa, following on from the its landmark IPO on the London and Nigerian Stock Exchanges, completed in June 2019, where Standard Bank acted as Joint Bookrunner.
Enock Kondowe, Head: Investment Banking, Malawi for Standard Bank said: “The IPO of Airtel Malawi represents a ground-breaking transaction for a key multi-national client in our International franchise, Airtel Africa, and its parent, Bharti Airtel. Its successful close demonstrates Standard Bank’s unique position in offering market-leading strategic international banking product expertise to our clients alongside our world-class transaction execution and delivery in Malawi.”
The IPO was structured as a 1.65 billion share base deal with a 550 million share upsize option. As a result of strong demand delivered by Standard Bank Group, the upsize option was exercised in full, with the total transaction significantly oversubscribed.
Airtel has consistently invested in its infrastructure, with 54% market share and four million subscribers, offering coverage to 85% of the population. It has the widest 3G and 4G network in Malawi and was the first to roll out mobile data and a mobile wallet in the country. In 2018, it was named the “Most Popular Brand” in Malawi by Milward Brown a global leader in brand strategy consulting, advertising development and brand equity research.
“The IPO provides a platform to deepen Malawi’s capital markets, providing new investment access to one of the Country’s leading corporates on-exchange. With 20% of Airtel Malawi now in the hands of the Malawian public including strong retail participation in the IPO, Malawians, including the customers of Airtel Malawi, can share in the Company’s success story,” said Kondowe.