Airtel Africa debut in London Stock Exchange (LSE), it appears, did not go well. Last Friday, when it was listed in the LSE, the stock opened lower than expected at 77 pence per share as against the listing price of 80 pence per share. Even after that, the stock prices moved downwards and fell by 16% to 67 pence per share. The volume of traded shares is far off the mark set. An volume of 33.54 lakh shares were traded on LSE platform. The company wanted to sell shares in the range of 595.2 million-744 million in the offering to raise up to 595 million pounds (approximately US$ 750 million), including an overallotment option. The second largest telecommunication network in Africa -Airtel Africa- as on March 31, 2019 had 99 million customers across three regions-Nigeria, East Africa and rest of Africa. Stock market watchers still are deciphering the reasons for the bombing of the shares in LSE. One reason they attribute is the lackluster performance of the telecom giant across continents including in India, where it is headquartered. Also, the debt burden of the company is increasing on account of the huge loans it is servicing and consistent poor performance. The company, the general perception is that, is pushed to the second by the recently formed Reliance Jio, which according to sources, enjoy more clout with the present government in India.
In the recent times, a few shares debuted at LSE met with the same fate, such as IPOs of Amigo Holdings, Funding Circle Holdings and car maker Aston Martin Lagonda Global Holdings PLC. These shares were opened lower than their offer prices despite unduly high hopes pinned on them. Airtel Africa has re-constituted its Board of Directors that now have representation from Bharti Airtel and the investors. Bharti Airtel’s Africa arm had reported a net profit of US$ 83 million during the quarter ended March 31, 2019, as compared to a net loss of US$ 49 million a year ago. The company is on record that some of the proceeds of the IPO would be used for retiring its debt. The company will also list in the Nigerian market shortly.
