Africa’s richest man Aliko Dangote is seeking to raise Sh200.8 billion ($1.55 billion) in exchange for three percent equity in his Nigerian refinery business.
The initial public offering (IPO) in Nigeria has drawn widespread interest from not just the country but across the continent with the multi-billionaire businessman receiving a multitude of queries on how investors in other parts of Africa including Kenya can be part of the region’s largest IPO.
What is Dangote exactly listing and why?
Dangote is selling 4.1 billion shares, representing a three percent stake in the Lagos based Dangote Petroleum Refinery and Petrochemicals Freezone Enterprise at a cost of Sh49.25, about 38 US cents or 525 Naira.
Proceeds from the IPO will be applied in scaling the firm’s processing facility/oil refinery, doubling its capacity from the current 700,000 barrels per day to 1.4 million barrels per day.
Why has the IPO generated significant interest from Kenyan investors?
The billionaire businessman initially mulled cross-listing the IPO across five other African exchanges including Kenya, South Africa, Egypt, Ghana and Rwanda bringing the firm’s listing to the country’s doorstep.
Outside of the IPO, Dangote chose Kenya as the site for his next project-an East African oil refinery in Lamu. The announcement of this project, which is set for ground breaking shortly, has catapulted the billionaire businessman into the consciousness of Kenyans.
Dangote was previously the subject of much interest and intrigue in Kenya when he previously expressed interest in purchasing the Arsenal Football Club from its current majority owners-the Kroenke family from the US. Dangote is a fan of the North-London based sports franchise.
Why hasn’t Dangote sold the refinery at the NSE?
Despite harbouring plans of cross-listing the IPO, Dangote’s refinery will be listed in Nigeria with sources attributing the sole exchange listing to complexities involved in floating the company across five other exchanges at the same time.
The planned cross listing would have for instance required multiple regulatory approvals simultaneously, a difficult feat which would have likely delayed Dangote’s fund raising.
Does that mean that I can’t access the IPO from Kenya?
No. While the IPO is not approved or publicised in Kenya, investors can get in on the offer through private placements which entails individuals accessing the floated shares under the foreign investors window.
Several local brokers including AXYS Investment Bank have partnered with leading brokers in Nigeria to make the offer available to its clients in Kenya. Others such as Kestrel Capital are also working to offer similar access.
Are there other ways of accessing the IPO?
The Nairobi Securities Exchange (NSE) and the Capital Markets Authority (CMA) are both working on a more direct solution to accessing the Dangote IPO before its October 13, 2026, closure date.
Once approved by the CMA, the solution would turn the Dangote IPO to a public offering in Kenya, bringing the transaction to a wider investor base in the country.
How many of the 4.1 billion shares can I buy?
The IPO minimum subscription is 10 offer shares, but no maximum is set, implying that only the allotment criteria, which is to be determined after the close of the IPO, can limit one’s access to more shares in the offer.
For a Kenyan investor, the minimum subscription implies one would have to invest at least Sh492.50 to access the IPO.
Under private placement however, the minimum threshold is higher as local brokers primarily go for high net worth/sophisticated investors. AXYS Investment Bank for instance has set the minimum subscription at Sh258,920 ($2,000) with the last day of subscriptions set at October 7.
Where will the purchased shares trade?
Shares from the Dangote IPO will be domiciled in the Nigerian Stock Exchange where they will trade after the offer closes. The shares could eventually trade on other exchanges including the NSE if the firm is cross-listed.
Dangote has hinted that the subsequent cross-listing of the company is on the cards, including overseas options like London and New York.
What would an NSE cross-listing mean?
The cross-listing of the Dangote refinery at the NSE would allow Kenyan investors to buy and subsequently sell shares in the firm on local currency terms while giving them closer visibility on trading. Cross-listing is widely seen as a move to address investor concerns including the possibility of foreign exchange losses which would occur presently from the conversion of Kenya shillings to dollars and Nairas, and the vice-versa.
Why has the Capital Markets Authority cautioned investors about the IPO?
Cognisant of the potential for fraudulent platforms posing as genuine brokers to the IPO, the CMA has advised investors to independently verify veracity and source of any prospectus or other offering document before making investment decisions like payments, highlighting widespread public interest in the offer.
Will Dangote list the Lamu refinery in the NSE?
While Dangote has not expressly spoken of listing the soon to be established Lamu refinery, analysts expect the listing of the facility at the NSE down the road, aligning with the billionaire’s goal of deepening the participation and ownership of retail investors in African capital markets.
Separately, Dangote has outlined plans to list each enterprise from his vast business empire which spans oil refining, cement, petrochemicals, sugar, salt and fertiliser.
