MTN’s NSE-listing, what you need know, and analysts’ forecasts

The most anticipated and biggest listing on the Nigerian Stock Exchange is happening right now in Lagos, Nigeria. We are talking about none other than the MTN Nigeria listing. As you can expect, Nairametrics is all over this situation, all in a bid to gather all the information you need to know.

While we wait for reports from the event to come in, we got ahold of MTN’s listing report, as compiled by Coronation Merchant Bank. Now, let us get right into it; shall we?

MTN is listing by introduction: You are probably wondering what this means? Well, according to the Nigerian Stock Exchange, there are about five different ways to list a company’s shares on the Nigerian bourse.

The most popular one is through Initial Public Offering, which basically avails the investing public the opportunity to subscribe to a company’s shares. Two things are involved when shares are listed through an IPO- an offer for subscription and an offer for sale.

Listing by introduction, on the other hand, has to do with the listing of a company’s shares without an Initial Public Offering. According to the NSE;

“YOUR COMPANY’S SHARES ARE LISTED WITHOUT A PRIOR IPO. THE COMPANY WOULD USUALLY HAVE RAISED CAPITAL PRIOR TO APPLYING TO LIST, AND ALSO MUST MEET THE LISTING REQUIREMENTS – INCLUDING A MINIMUM NUMBER OF PUBLIC SHAREHOLDERS (300 TO LIST ON THE MAIN BOARD; 51 TO LIST ON THE ASEM) AND MINIMUM PUBLIC FLOAT (20% FOR THE MAIN BOARD; 15% FOR ASEM).”

What MTN’s listing by introduction entails: According to Coronation Merchant Bank, no capital is being raised from the listing. This is because MTN’s existing shareholders have not made any commitment to sell off some of their shareholdings. Consequently, no liquidity should be expected from this process. It can best be said that the company is basically doing this out of requirement.

It should, however, be noted that the company will become Nigeria’s only listed telecoms company. It is also set to become the biggest company on the NSE in terms of market capitalisation. Now, this is interesting, especially when you consider the fact that it will be bigger than the almighty Dangote Cement Plc.

Analysts’ Forecast: According to the report by Coronation Merchant Bank, MTN Nigeria is expected to continue its steady growth in the coming years. For not only does it operate in an industry that continues to thrive, the company defiled odds when it recorded an impressive FY 2018 result, despite recent regulatory sanctions imposed on it.

“MTN NIGERIA IS EMERGING FROM A PERIOD OF TURBULENCE STEMMING FROM REGULATORY FINE IMPOSED IN 2015. NOW, HOWEVER, WE BELIEVE THAT MTN NIGERIA HAS ENTERED INTO A PERIOD OF RENEWED GROWTH 2019F-22F, NOT SO  MUCH BACKED BY GSM GROWTH BUT BY INTERNET SUBSCRIBER GROWTH AND BY DATA AND MOBILE FINANCIAL SERVICES (MFS).”

Fore years forecast for MTN: Specifically, analysts are forecasting that the company’s revenue growth between now and 2022 will be driven mainly by Data and Digital & MFS. See details below:

  • Projected revenue growth from data: 15.5%
  • Projected revenue from digital & MFS: 9.7%
  • Projected revenue from voice: 3.6%
  • Overall growth is projected at 6.2% between now and 2022.

Increase in operating cost: Meanwhile, the company’s operating cost has also been projected to increase over the next four years. According to the report by Coronation, the company’s operating cost will grow by 5.8% between now and 2022.

Source: Nairametrics

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