Vodacom Group’s Tanzania initial public offer (IPO), the biggest in history of Dar es Salaam Stock Exchange (DSE), received extension approval for three more weeks from today.
Vodacom primary share sale was scheduled to end today (Tuesday) but the firm asked for extension to allow retail and institution investors more time to subscribe.
Tanzania’s Capital Market and Securities Authority Principal Public Relations Officer Mr Charles Shirima said the go ahead was given based on size of the IPO.
“They (Vodacom) said many will be left out if the deadline adhered as planned on April 19. I know some members of parliament also asked for extension,” Mr Shirima said.
Mr Shirima did not rule out current poor liquidity in the market to warrant the extension of biggest IPO in the history of Tanzania capital market.
Vodacom IPO was staged to end today but the extension pushed back the deadline to May 11. The listing date pegged on June 6.
The leading telecom plans to raise 476bn/- ($213 million) in a share sale at 850/- ($2.5) each out of 560 million shares. This was the first of a series of IPOs by telecoms on the domestic stock exchange where foreigners are barred.
Orbit Securities Director General, Simon Juventus said the extension would benefit mainly retail investors as many had family commitment, fees and Easter Holiday celebration.
“Demand for extension was vivid especially from retail investors.
“Buyers have flocked our offices today knowing it’s a deadline, but after extension news broke out eases,” Mr Juventus said. Orbit is the IPO sponsoring broker.
He said, however, the progress of the IPO was going on smoothly even before extension.
Under the Finance Act of 2016, which amended the Electronic and Postal Communications Act of 2010, the government made it a legal requirement for the country’s telecoms operators to float 25 per cent of their shares on the DSE.
Vodacom is the country’s largest operator with 31 percent market share, followed by Millicom International Cellular SA’s Tigo, Bharti Airtel Ltd.’s domestic subsidiary and Halotel, a unit of Vietnam’s Viettel Group.