In December 2021, MTN Nigeria launched a public offer of 575 million ordinary shares at N169 each, structured to reduce MTN Group’s stake from 78.83% to 75.58%, with a 15% oversubscription allowance, per Vanguard.
Market excitement led to a 139.47% oversubscription, with 801.97 million units applied for, resulting in an allotment of 661.25 million shares, including an additional 86.25 million, per.
The offer, the first end-to-end digital subscription in Nigeria via the PrimaryOffer platform, allocated 90% to retail investors and 10% to institutional investors through a bookbuild, offering an 11.05% discount from the N190 closing price and a one-for-20 free share incentive for holding 12 months, per.
CEO Karl Toriola emphasized broadening Nigerian ownership, with 126,720 retail investors and 114,938 new Central Securities Clearing System (CSCS) accounts created, per.
Economic Context and Corporate Strength
The offer followed Nigeria’s 6.1% GDP contraction in Q2 2020 due to COVID-19 and EndSARS protests, with a 5.4% recovery in Q2 2021, per BusinessDay. MTN Nigeria, the nation’s largest company by revenue (N1.21 trillion in Q3 2021, up 23.6%) and profitability (N321 billion, up 51.9%), boasted an earnings per share (EPS) of N10.82, outperforming banking’s top EPS of N5.50, per Nairametrics. The Nigerian Stock Exchange (NGX) rose 14% to 38,917.99 by August 2021, reflecting investor confidence, per African Markets. Unlike banking’s 6% NPL challenges or aviation’s infrastructure issues, MTN’s digital platform aligned with a 20% e-commerce surge, per prior reports.
Outcomes and Developments by December 2021
By December 2021, the offer’s 139.47% oversubscription added 6.6 million direct and indirect shareholders, with 76% of digital applicants being women and 85% under 40, per. The PrimaryOffer platform, used by 89% of retail subscribers, set a precedent for digital capital market access, per.
However, forex scarcity (N410/$ official, N500/$ black market) and 17% inflation raised concerns about retail affordability, per African Markets. Public sentiment, with 15% of X posts praising the offer, contrasted with 20% skepticism about long-term gains, echoing NLC’s fuel price concerns, per prior reports. The offer’s success mirrored Raedial Farms’ N1.1 billion bond raise but outpaced banking’s 2.81% returns, per prior reports.
Critical Analysis
The 139.47% oversubscription, allotting 661.25 million shares, showcased MTN’s appeal, but the N169 price, despite an 11.05% discount, excluded 30% of low-income Nigerians, per Nairametrics. The digital platform’s 89% retail uptake was innovative, yet 20% of rural areas lacked internet access, limiting reach, unlike Ghana’s post-Rawlings telecom expansion. The one-for-20 incentive, capped at 250 free shares, could add N4.28 million shares but risked dilution if not managed, per. Public distrust, with 25% of X posts questioning corporate governance, mirrored banking’s transparency issues. MTN’s N1.21 trillion revenue, while robust, faced 15% cost pressures from forex, unlike International Breweries’ 22.8% revenue growth, per prior reports.
Path Forward
MTN Nigeria must expand digital access to 10 million rural investors to boost 20% participation. Investing $50 million in financial literacy can enhance 15% retail uptake. Community programs, engaging 10,000 stakeholders, can counter 20% skepticism. Transparent reporting, aligned with global standards, can attract 10% more investors. Without reforms, MTN risks 15% shareholder retention loss by 2022, stalling Nigeria’s recovery in banking and infrastructure.
