Airtel has taken steps to enhance its initial public offering (IPO) by doubling the number of incentive shares offered to potential investors. The IPO, originally scheduled to close on October 13, was extended by 15 days and is now set to conclude this Friday. The telecom company hopes that this move will attract a broader range of participants.
In a statement released yesterday, Airtel announced its decision to double the share incentive offer with the goal of encouraging greater participation from Ugandan investors. Mr. Manoj Murali, the Managing Director of Airtel, emphasized the company’s commitment to promoting wider ownership of their shares. He stated that the increased incentive shares are available to all categories of investors, making the IPO more appealing.
Airtel initiated its IPO by offering eight billion shares at a price of Shs100 at the end of August, aiming to raise at least Shs800 billion. However, the company extended the offer by one day before the closure.
As the IPO nears its conclusion on October 27, Mr. Manoj encouraged those interested in making last-minute applications to do so. Airtel initially postponed the IPO for a year due to market conditions but proceeded amid the challenges posed by the COVID-19 pandemic and the Russia-Ukraine conflict.
Analysts previously speculated that Airtel extended the IPO to maximize share uptake, as the response had been below their projections. The company’s IPO listing on the Uganda Securities Exchange is in compliance with a legal requirement mandating telecommunication companies to allocate at least 20 percent of their stake to Ugandan investors. MTN met this requirement in 2021 as part of its licensing conditions.
Airtel also disclosed that retail investors applying for shares ranging from 2,500 to 18.5 million will now receive 10 incentive shares for every 100 shares allocated, an improvement from the previous offer of five incentive shares for every 100 shares. These updated incentive shares will also be extended to professional investors in various categories, including those who had already applied for the IPO.
