Less than two months after the landmark listing of Kenya Electricity Generating Company (KenGen), two more companies, Scangroup and Equity Bank, have debuted on the Nairobi Stock Exchange (NSE).
The KenGen IPO, originally scheduled for late last year, but which finally took place in June, was more than three times oversubscribed, raising more than $100 million for the government.
The sale of a 30% stake in the company was Kenya’s largest IPO to date. The previous largest was an approximately $30 million-equivalent listing in 1996 of Kenya Airways. Following that listing, Dutch airline KLM took a 26% stake in the company.
Pent-up demand drove KenGen’s share price up by as much as 400% on its first day of trading. In total, the government sold 659 million shares in the company at KSh11.90 a share, giving a total of KSh7.8 billion ($107 million).
About $10 million of shares were sold in the Scangroup IPO, at about $14 a share, a 43.4% stake in the company. The offering was five times oversubscribed. Half of the shares were allocated to retail investors, 45% to institutional accounts and 5% to employees.
| NSE shows its vibrancy |
| Index value 2002-2006 |
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| Source: Nairobi Stock Exchange |
Scangroup can now take advantage of a new law allowing newly listed companies to pay a lower rate of corporation tax of 20% instead of the standard 30% for the first five years after listing.