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Airtel Uganda has initiated its initial public offer (IPO) worth Sh31.3 billion, which commenced on Wednesday. The telecom company aims to boost interest in its shares by offering free shares to participating investors.
This opportunity is also extended to Kenyan investors. The distribution of these incentive shares will be based on a proportional system, where larger application volumes will yield additional free shares. The incentive shares serve as a reduction in the purchase price, which has been set at USh100 (equivalent to Sh3.91) per share. A total of eight billion shares are being offered in this IPO.
Retail investors who purchase between 2,500 and 18.5 million shares will receive five incentive shares for every 100 shares bought. Those applying for 18.5 million to 37 million units will receive 10 free shares per 100, while applications exceeding 37 million units will be rewarded with 20 free shares per 100.
For professional investors, a minimum of 40 million units is required to qualify for the incentive shares. Applications ranging from 40 million to 200 million shares will receive 10 free shares per 100, while those applying for 200 million to 400 million shares will receive 15 free shares. The incentive shares increase to 15 per 100 for applications between 400 million and 2.85 billion shares, and reach 37.5 per 100 for applications surpassing the 2.85 billion threshold.
This strategy employed by Airtel Uganda follows the example set by MTN Uganda in its 2021 IPO, where successful applicants received between five and 10 units for every 100 units allocated.
Airtel Uganda’s intent to offer these incentive shares aligns with its goal of broadening Ugandan shareholding. The IPO is set to conclude on October 13. The allocation process will prioritize Ugandan retail investors and employees, followed by Ugandan professional investors, EAC partner states (including Kenya), and foreign investors.
Unlike other IPOs in Kenya, there are no allocation limits imposed, meaning that Kenyan investors can freely acquire shares in this offering without any restrictions.
