Airtel Money is set to make a highly anticipated debut in London with a valuation of the African-based mobile payments company estimated at up to $9 billion, becoming one of the biggest IPOs on the London Stock Exchange in recent years.
The firm, which is owned by Airtel Africa and listed on the London Stock Exchange, will aim to raise at least $800 million from the flotation of shares already held by its owners. Additional information, including the range of indicative pricing and size of the offering, will follow in early October.
What Does Airtel Money Plan?
The IPO to be made will be a secondary offering, as Airtel Money itself will not receive any funds from the transaction, as the company’s shareholders will offer some shares to investors on public markets.
Currently, Airtel Africa holds approximately 78% equity in Airtel Money. Other minority holders of Airtel Money equity include TPG, Mastercard, Qatar Investment Authority, and Chimetech Holding. It has been noted that Airtel Africa is aiming to remain a long-term holder after the listing.
The deal would allow the company to have a market valuation and also offer it a chance to have a publicly listed valuation as one of Africa’s biggest mobile money operations.
Why Is This Valuation Important?
An estimated valuation of $8 billion to $9 billion could enable investors to have a new benchmark in valuing their African digital payments companies.
According to the company, Airtel Money recorded 53 million monthly active users and revenues of $399 million, indicating a year-over-year growth of 38%. In addition, Airtel Money has forecasted mid-20% growth in revenues at constant currency until March 2027 and beyond.
Thus, the listing would offer institutional investors an opportunity to assess larger African mobile money firms, but differences in other factors like regulatory environment, profit margin, among others, may prevent valuation comparability.
Potential Implications of the Listing on the African Fintech Industry
The successful completion of the listing would create a benchmark for the African fintech industry whereby a company would be listed on the public markets from being privately held.
Mobile money is now one of the major financial inclusion tools in sub-Saharan Africa, where access to banks has been inconsistent. Airtel Africa operates in 14 African countries, while its mobile money segment provides various financial tools such as wallets, payments, merchant solutions, savings, and insurance, among others.
The listing will allow the existing investors to unlock part of the value of the business through the liquid public markets, while the Airtel Africa shareholders will be able to have an independent valuation of the Airtel Money share of the parent company’s value.
Why is Airtel Money Listing in London?
The Airtel Money listing will follow Airtel Africa’s market structure that includes being publicly listed in London since 2019 and also having a secondary listing in Nigeria.
This decision provides Airtel Money with access to investors in London, even as it has a corporate presence in the market. The company’s headquarters is based in the Netherlands, while its strategic offices are in Dubai, thus demonstrating the multinational nature of a firm that operates mainly in sub-Saharan Africa.
What Would the Listing Imply for Nigerian and African Investors?
From the perspective of Nigerian and African investors who invest in Airtel Africa, the listing could lead to a higher level of transparency in terms of the value of one of Airtel Africa’s most important businesses. However, the transaction under consideration will not imply the automatic listing of Airtel Money as a separately traded Nigerian company.
The result will be determined by the IPO price, the degree of residual ownership in Airtel Money by Airtel Africa, and the free float.
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