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Home Industry Everything You Should Know about MTN Public Offering  
Industry - December 13, 2021

Everything You Should Know about MTN Public Offering  

MTN Nigeria’s announcement of its initial public offering on December 1, 2021, has many Nigerians speculating if they should invest in the shares. 

Sources close to the matter state that this groundbreaking public offering of 575 million units of ordinary shares of Nigeria’s telecom giant, MTN, may lead to an oversubscription.

However, the parties to the offer appear to have anticipated this by allowing for up to 15% oversubscription.

In May 2019, MTN Nigeria was listed on the Nigeria Stock Exchange, bringing the exchange’s market capitalisation to over N 1.8 trillion. This was one of the most significant advancements in Nigeria’s stock market.

Nigeria was awarded the best performing stock exchange globally by Bloomberg a year later, with a 50% increase by the end of 2020. The Lagos Stock Exchange reached new highs for the first time since December 2007, outperforming 92 other stock exchanges worldwide. 

Many Nigerians wanted to participate in MTN Nigeria when it was listed on the NSE, but they were constrained by how closely held the shares were and the lengthy process of obtaining valuable stock on the NSE. 

Now the second most valuable company in Nigeria, behind Dangote Cement, MTN Nigeria has opened the gates of its tightly-held shares to Nigerian for a public offering.

Mtn Group owns around 79% of MTN Nigeria’s total stake. However, the company is currently offering 14% of its stock to as many Nigerians who show interest.

Stock dealers and investors are claimed to be looking at the issuer’s profile, and some distinctive elements of the offer to predict post-offer investor returns.

MTN Nigeria’s most recent financial statement also shows outstanding corporate profits strength across all sectors, with basic earnings per share (EPS) of N10.82, about double that of the highest performing stock in the stock market’s banking sector.

The profitability strength was also shown in the nine-month results for 2021, which showed a 51.9% increase to N321 billion, the highest growth rate in the Nigerian business sector.

The company’s revenue is also astounding in corporate Nigeria, at N1.21 trillion in the third quarter of 2021, making it the first corporation to break the trillion barriers, with a year-on-year growth rate of 23.6%.

The potential of owning a piece of the business through the ongoing share sales has caught the interest of the investment community.

The excitement appears to align the investment community’s interest with the company’s key objectives in the public offering.

According to MTN Nigeria Plc’s Chief Executive Officer, Kari Toriola, the offer is intended to help the company extend its ownership base.

According to him, the offer to sell up to 575 million shares in MTN Nigeria held by MTN Group has been carefully structured, ‘‘to ensure that it broadens our local shareholder base providing opportunity for as many Nigerians as possible to become shareholders in MTN Nigeria and share in the growth and value which this great business creates’’.

The MTN public offering is not intended to raise cash. Rather it is designed to be a structured sale of MTN Group’s interests from slightly under 79% to 65%.

According to the corporation, MTN Group is not leaving Nigeria since they feel there is no MTN Group without MTN Nigeria.

According to Toriola, ‘‘ It is genuinely a desire to have as many Nigerians as possible to become shareholders in this business and share in the value we create in the future going forward, and there is no deeper way to deepen the partnership between MTN Nigeria and the community and the people that we serve’’.

MTN Group President and CEO Ralph Mupita, stated at the investors’ roadshow in Abuja last week that the MTN Group had taken a clear strategic decision to develop shared value across its divisions.

He added: “The best way we can do that is by enabling broad ownership in our operating companies. This offer is the first phase of that process in Nigeria, as we progressively reduce our shareholding from 78% to 65% over time. I am incredibly proud to be able to be here today, engaging directly with the Nigerian shareholders we hope will join us on the next phase of our journey”.

MTN began its adventure in Nigeria in 2001 with a core group of Nigerian investors who supplied startup investment and have remained partners as the company has developed and thrived over the years. This year marks the company’s 20th year in Nigeria. Toriola believes there is no better way to commemorate the occasion than by expanding Nigerian involvement in MTN Nigeria’s holdings through a public offering of its shares.

‘‘It is one part of deepening the relationship between MTN Nigeria and this country. We are a Nigerian entity, led by Nigerians, staffed by Nigerians. We export talents from Nigeria to the rest of MTN Group’’.

 The sale of shares has been designed to maximise long-term retail movement.  

What Experts have to Say About the Deal

According to investment banker Wale Okunrinboye, MTN has solid numbers and could be a good buy for retail investors.

He said, “Fundamentally, I think MTN is a solid company. It has grown astronomically since it started in 2001 and is dominating the telecom space. Its demand is inelastic as people always need to communicate and so the product will always be in demand. Also, you don’t have many players going into that space because the entry barriers are quite large.

“Also, in terms of growth prospects, aside from the increasing Nigerian population, there is also the increasing data consumption. Going forward, data consumption will increase even more as we go more digital. The revenue from data consumption continues to increase quarter after quarter”.

How to Invest in MTN Public Offering

Any Nigerian with a Bank Verification Number (BVN) can acquire MTN shares on a mobile phone for a little N3,380.

Many Nigerians want to own a piece of MTN, but they don’t want to go through the hassles of buying shares in a firm listed on the Nigeria stock exchange.

After observing the procedure, the processes are simple and less expensive to follow than the usual purchasing methods in Nigeria. The steps have been broken down into ten simple processes.

Download the Primary Offer app from the Google Play store or the Apple iOS store to your smartphone or tablet. Chapel Hill Denham created the app, so keep an eye out for it. The download and installation should take less than three minutes if you have a good mobile network.

Create an account: Create an account with your date of birth and a bank verification number. You’ll also need to create a password, which you should keep as private as possible. After this, the app will already have some of your information, indicating that it is linked to the financial system.

Validate your account: After you’ve completed the registration process, you’ll be asked to input your security code. You should have already received the code in an email. It’s a one-time password that you’ll enter into the app to confirm your identity.

Begin by logging in: You’ll see a celebratory message on your screen after your account is complete. There would also be a blue button on the message inviting you to log in to the app. Enter your email address and a password you recently made to access the dashboard. Click on the MTN Nigeria deal once you’ve logged in.

Terms and Purchase: After clicking on the MTN Nigeria deal, you’ll be sent to a page where you may read the terms and conditions and agree on them by checking the unchecked column next to the purchase button. After that, select “buy” from the drop-down menu.

Decide on the number of shares you want to buy: “Enter your transaction details” should now appear on your most recent screen. Put the quantity of units you want to buy in the specified units column. You can purchase a minimum of 20 shares.

“The minimum application is 20 shares and multiples of 20 shares thereafter,” according to MTN, “thus 20, 40, 60, 80, 100, 120…etc.” There is no upper limit; nevertheless, the number of shares allotted will be limited to 575,000,000 ordinary shares.”

The price of a single share was N169. So you’ll need N3,380 to get the minimum number of shares.

Pay now: You click “pay now” after selecting the quantity of shares and checking the terms and conditions box. If you don’t have a CSCS account, the app will ask you to create one. A Central Securities Clearing System account is a financial infrastructure that allows securities transactions to be cleared, stored, and settled. It’s where all of your stock is registered.

If you have a CSCS account, select yes; otherwise, select no. The next course of action will be determined by the option you select. The procedure is the same for both replies. The software will assist you in setting up your CSCS account and processing payment for the shares.

Enter your account number and clearinghouse number if you already have a CSCS account. After that, you update your bank information, including where your dividends will most likely be paid, and then click “pay now.”

Pay with a credit card, a USSD code, or a bank transfer: You will be presented with several payment alternatives when you arrive at this page. Choose the one that best suits your needs, bank transfer, card payment, or simple USSD, and pay for the shares. Please keep in mind that bank fees will be added to your N3,380, bringing your total to N3,418.

Share allotment: Once payment is received, you will receive an email with payment information and confirmation of receipt. Your shares would be allotted in fewer than 15 days after SEC approval. You can simply become an MTN shareholder if you follow these procedures.

 

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