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.
Although Trainline’s debut last week has been held up as evidence that investors are not entirely hostile to domestic-focused companies in a Brexit-damped environment, two of the highest profile listings have been United Arab Emirates groups Network International and Finablr.
Raghunath Mandava, Airtel’s chief executive, said he was “delighted by the strong response” the offering had received. “This is a proud moment for the team that has built Airtel Africa into the second-largest mobile operator in Africa.”
“We are now the first telecom company to simultaneously list on the Premium segment of the London Stock Exchange and Nigerian Stock Exchange through an IPO.”