Investors bought only 64 percent of the shares in the deeply discounted initial public offering (IPO) by MTN Uganda (USE:MTNU), a statement from the company showed late Friday.

The telecom sought to raise Sh27.6 billion from the sale of 4.47 billion shares as part of the Uganda government’s push to spur local ownership in the industry.

The IPO, which was opened to East African investors –from Uganda, Kenya, Tanzania, Rwanda and Burundi— raised Sh16.94 billion (Ush535.9 billion).

Kenya’s National Social Security Fund (NSSF) bought 39.1 million shares in the Ugandan unit of South African-owned MTN for a 0.18 stake, securing sixth place among the top ten shareholders.

South Africa’s MTN Group was selling a fifth of its stake in its Ugandan subsidiary at a price of Ush 200 or Sh6.2 apiece.

To motivate investors, the telco offered free shares of between five and 10 units for every 100 units allocated. It required applications for the purchase of at least 1.1 billion shares. 

The incentive shares are rare for an IPO in the regional market and signalled MTN’s determination to ensure the offer was successful.

The IPO had been tipped to be Uganda’s biggest ever and seen as a major boost to its stock market, a small bourse with 40,000 investors trading just 17 stocks.

The shares will start trading on the Nairobi Securities Exchange (NSE) on December 7.

The listing will make MTN Uganda the second publicly traded telco in EAC after Safaricom IPO on the NSE in 2008.

Kenyan investment bank Dyer and Blair, owned by billionaire businessman Jimnah Mbaru, was the lead retail broker for the MTN IPO.