(AFRICAN MARKETS) -- With good news pouring in of multiple listings to be conducted this year, comes the disappointment from the first IPO of the year. TCCIA Investment Company Ltd (TCIL) launched its IPO on February 1st to a surprize to most. With the aim to raise TZS 45 billion, the company has only managed to achieve 2.3% (TZS 1.0bn/-) of its target during the six-week period.
The firm that expected to list on April 24, has now requested CMSA for a two week extension period. TICL sponsoring broker, Tanzania Securities Limited (TSL) Chief Executive Officer (CEO) Joaquim Bonaventure said the outcome was disappointing but they have not lost hope.
“The IPO period came to an end before we sealed a deal with a foreign underwriter. The underwriter may buy 75 per cent of the IPO.”
The main reason cited for the poor performance, was the IPO being overshadowed by the larger Vodacom Tanzania IPO. Vodacom launched the sale of its shares, just two weeks into the TCIL sale period. “Economic hardship also had its toll on the IPO. Investors failed to split their little cash to both IPO,” Mr Bonaventure said.
Despite this, veteran investors had initially expressed dissatisfaction with TCIL prospectus in the first place. Though the company had a clear investment plan and had posted profitability, the numbers did not excite the shark investors.
The company was upbeat that the target IPO would be met, seeing that the company had a very large web of branches across the country. The management also aimed to capitalize on the greater EAC and SADC investors. Despite this, there is no surprise that the IPO failed to mesmerize their attention. The brand lacked zazz. There was very little hype or build up; if you missed your morning newspaper, the sale was almost non-existent.
The capital markets in the country is still very premature and the unpredictable nature of the bidders and the presence of unsophisticated investors often make standard IPO outcomes unstable. Hopefully, the Vodacom public offering will bring in various first time investors that will be essential to support the future telecom and mining IPOs this year.