Five days left. ₦2.15 trillion on the table. And not one subscription figure published.
On October 12, Dangote’s refinery extended Africa’s biggest-ever IPO by two weeks, to October 27. Aliko Dangote said subscriptions were already three to four times the target. On October 19, the company said investors in more than 90 countries, including 51 of Africa’s 54 nations, had applied, and that the offer had broken records. It has not published interim subscription values or said which records it means.
So which is it? A sellout that needs more time, or a stretch to hit the number? And what exactly are Nigerians being asked to pay for?
What’s on offer
The refinery is selling 4.1 billion new shares at ₦525 each, about 3.3% of its enlarged capital, to raise about ₦2.15 trillion ($1.6bn). The minimum is 10 shares, or ₦5,250 (about $4). It is the first refinery offered to the public in the NGX’s 66-year history. Investors pay in naira but are promised returns in dollars, backed, the company says, by petrochemical export revenue.
Why extend a sellout?
There are two readings. Dangote’s: the offer is going so well that he wants more African investors to join, and some countries make cross-border buying hard. Kenya runs an indirect arrangement, and Uganda limits access to professional investors. The sceptics’ reading: demand is softer than the headlines. The market is split, and Proshare notes the only subscription figure on record is verbal. Final numbers are due November 3.
The ₦525 question
At the offer price, the refinery is worth about $49bn, more than double what it reportedly cost to build. The company denies the valuation is inflated. Renaissance Capital has gone further, valuing it a third above the offer price. Analysts remain divided.
The profit story helps the bulls: about $4.7bn in nine months. But that came while a US-Iran conflict kept oil and fuel prices high, so the question for any buyer is whether those margins last.
What it means for you
- Small applications get priority. Dangote has said applications of ₦50,000 or less will be favoured. Larger ones may be scaled back.
- Your money is locked. Funds stay tied up until allotment, which goes to the SEC on November 10, with trading expected around December 8.
- Holding is rewarded. The prospectus offers a free bonus share to those who hold at least 10 shares for 12 months.
- The float is tiny. With only 3.3% on offer, prices can move sharply once trading starts, in either direction.
What it means for the market
The NGX says the offer has revived talks with other companies about listing. The SEC says the bottleneck is a shortage of credible companies, not a shortage of investors. Oyedele has urged listing NNPC and NLNG to grow the market toward $1 trillion. One IPO can’t fix that, but it has shown that Nigeria can raise nearly double the previous record of $876m, set by MTN Nigeria in 2019.
The verdict is still weeks away
The IPO closes October 27, the real numbers arrive on November 3 and 10, and the first trades come in December. Until then, a very big number is being asked to speak for itself.
This is not investment advice. Read the prospectus before you subscribe.
Business Verge asks: Is the Dangote IPO an invitation to build wealth or a bet on one man’s valuation? Tell us what you’d need to see before you put your savings in.
