Vodacom Tanzania to raise USD213.45 million via IPO

Vodacom Tanzania

Vodacom Tanzania will be going to the Tanzanian stock market to raise capital for the first time.

Vodacom said in an email statement that its Tanzanian unit will start a more than month-long initial public offering (IPO) on March 9 and expects its shares to start trading in mid-May, the firm said on Tuesday.

The company, a subsidiary of South Africa’s Vodacom and the biggest operator in Tanzania, aims to raise 476 billion shillings ($213.45 million) by selling 560 million shares.

It will become the first telecoms firm to launch an IPO under Tanzania’s mandatory listing rules. The firm set its IPO share price at 850 shillings each and the sale will be equivalent to 25 percent of its total equity.

Vodacom said the IPO will run from March 9 to April 19 and public trading of shares on Dar es Salaam Stock Exchange (DSE) will commence on May 16, according to the prospectus.

The Vodacom Tanzania IPO would be the East African country’s biggest ever, stock brokers told Reuters News Agency. Industry players said they expect the IPO to attract strong interest from local investors.

It is pertinent to know that foreign investors cannot take part in the IPO but can invest after the listing which according to the Tanzanian market regulation is to ensure local investors have a reasonable stake in companies operating in the country.

George Sawe, a stock broker at Dar es Salaam-based Zan Securities Ltd told Reuters News Agency that “There is a lot of appetite in the market. Many investors have been waiting for this particular IPO,”

In the Tanzanian market, Vodacom is competing with Millicom’s Tigo and Bharti Airtel B.V. Both competitors have submitted their filings for IPOs. By the time all IPOs are completed, all telecom companies in Tanzania would have been listed on the market.

It is interesting to know that Vodacom Tanzania filed for an IPO with the Capital Markets and Securities Authority (CMSA) in November to meet a government requirement for telecoms firms to list at least 25 percent of their shares. The application was approved last week.

Earlier last year MTN Group, said it was planning to list its Nigerian unit on the Nigerian Stock Exchange, NSE. The plan has since been placed in the cooler over regulatory challenges and slow growth.