Airtel IPO: Buganda Kingdom announces purchase of 2m shares, worth Ugx200m

The Buganda Kingdom has promised to buy 2 million shares in the ongoing Airtel Uganda Initial Public Offer as a demonstration of its commitment to the Kingdom’s economy and cooperation with key market players.

This number represents a significant investment of Ugx200 million, which will earn the Kingdom an additional 100,000 incentive shares as part of the Initial Public Offer (IPO).

The announcement was made by the Kingdom’s Prime Minister Charles Peter Mayiga at Bulange–Mengo on Sept.26.

This move signifies the enduring strategic partnership between the Buganda Kingdom and Airtel Uganda, while also seizing an opportunity to participate in Uganda’s thriving telecom sector.

The offer to buy shares in Airtel Uganda opened at 10:00 a.m. on August 30, 2023, and will close at 4:00 p.m. on October 13, 2023.

Manoj Murali, the Managing Director of Airtel Uganda unveiled Airtel Uganda’s IPO before the Kingdom officials.

The IPO is offering 8 billion existing ordinary shares, equivalent to 20% of the company.

Going public aims to expand the ownership of Airtel Uganda among Ugandan investors, enabling them to have a stake in the company.

The government of Uganda directed all mobile phone operators in the country to list on the local bourse, the Uganda Stock Exchange (USE) within 12 months from June 2021 to encourage Ugandans to own a share in them.

The directive followed reports that operators were making ‘abnormal’ profits from Ugandans and repatriating most of it abroad.

Airtel and Buganda Kingdom

Since 2014, Airtel Uganda has been a partner in the Kingdom’s initiatives, including the annual Kabaka Birthday Run, which is Africa’s largest cultural and sporting event, the Masaza Cup Tournament, Eid Celebrations, and various community engagement activities that positively impact the lives of people in Buganda and beyond.

Peter Mayiga, commended Airtel Uganda for their steadfast support of the Kingdom’s initiatives, particularly the resounding success of the Kabaka Birthday Run.

Mayiga encouraged the public to take part in the Airtel IPO and stressed the importance of making informed investment decisions.

He advised, “Be a smart investor and acquire shares in publicly listed companies beyond risking their money in popular ventures – hair salons, matatus, rentals, and boda bodas.

Robert Baldwin, Chief Executive Officer of Crested Capital, the lead sponsoring broker, commended the Kingdom’s investment, acknowledging that it would yield substantial future benefits for the Kingdom. 

The background

The IPO fulfills regulatory requirements under which the company has to mandatorily list by December 16, 2023.

Airtel Uganda Ltd is a subsidiary of Airtel Africa plc. It hopes to raise Ugx800 billion in an IPO after setting the price at Shs100 per share – with the minimum application of 2,500 shares — which amounts to Ugx250,000.

Airtel Uganda Limited has offered mobile telecommunications services in the country since 1995 and is currently the co-leader in the market with 49% revenue, and 47.3% subscriber market share, respectively according to available data.

The telecom company has 14.3 million active subscribers across 146 districts of Uganda.

For the year ended December 31, 2022, Airtel Uganda had revenues, EBITDA and net income of Shs1,594 billion, Shs888 billion, and Shs326 billion, respectively.

Airtel Uganda, previously Celtel Uganda Limited, launched the country’s first mobile cellular network in 1995. Following the acquisition by Airtel in June 2010, the business was rebranded as Airtel Uganda.

Absa Bank Uganda Ltd is the lead transaction adviser to the IPO, while Crested Capital is the lead sponsoring broker.

In 2021, MTN Uganda took the lead in fulfilling this legal mandate by conducting an initial public offering on the Ugandan stock exchange, generating Ugx535.94 billion, less than two-thirds of its target.

Can Airtel succeed where its archrival MTN failed? The answer to this question will be available after October 13, 2023.