Airtel Uganda holds discussion on timing of IPO

On Wednesday, India’s largest telecom operator Bharti Airtel said the unit managing its Africa operations is considering a potential initial public offering (IPO).  

According to local media reports, Airtel public relations manager David Birungi confirmed this but did not go into details, saying the company will inform the public when negotiations are complete.  

As such, Airtel is expected to sell at least 20 percent of its shares through an Initial Public Offer to fulfill a requirement under the National Broadband Policy.  

“The above discussions are at an exploratory/preliminary stage, and at this juncture, there is no certainty of any final decision or outcome,” the company added.  

Analysts say that an IPO will monetize Bharti Airtel’s Africa operations at a time when it is engaged in a bruising battle with Reliance Jio Infocomm Ltd in India.  

The company, which has been going into a price war since the launch of Reliance Jio in September 2016, was hit hard when the telecom regulator decided to reduce interconnection usage charges imposed by mobile networks handling incoming calls from rivalries networks. As a result, Bharti Airtel’s quarterly profit plunged 39 percent to $ 41 million in the December quarter.  

In addition, a report from the Daily Monitor says the cellco will release further details later, including the possible timing of the IPO. According to UCC, the requirement for listing must be within two years from the date of issuance of the license undertaken per the existing listing rules as prescribed by the Uganda Capital Markets Authority.  

It is worth mentioning that Airtel renewed its license in 2020, as it is supposed to be listed on the stock exchange this year. Meantime, Airtel Uganda paid the Ugandan government $77.79 million to renew its 20-year license, its latest financial report shows. 

Also, Africa’s revenues grew by 5.3 percent year-on-year to $783 million during the quarter compared with $744 million a year ago. This was largely led by strong growth in data and Airtel money transaction value.  

“They have made Africa business profitable; so, the (company’s) plan is to get value out of it. In most markets in Africa, they are either number one or number two, so the valuation of Africa business will be attractive,” a Mumbai-based analyst said.