African IPOs set to raise over $3.1 billion in 2016


Africa’s equity capital markets are set for a strong 2016 following a reasonable 2015 despite commodity price falls and capital flight from emerging markets hitting the continent’s major economies.

About 15 Initial Public Offering (IPOs) are already in the pipeline, with one, Nigeria’s Interswitch, which processes payments for banks and operates in five African countries, could be Africa’s first billion dollar IPO and first public Fintech company if it proceeds with plans to dual-list in London and Lagos rather than go for a trade sale.

If the 15 in the pipeline already proceed they are likely to raise $1.5 billion more than last year’s 21 African IPOs; almost twice as much as the total raised in 2015 and more than raised 2011 to 2013 combined.

In reality the equity deal volume may well be higher, with deals not currently included in the formal pipeline*, including:

– Tanzania’s Dar es Salaam Stock Exchange’s plan to self-list this year

– Botswana’s biggest IPO to date, that of Botswana Telecommunications Corporations Limited, which will close on 4 March

– Real estate fund Tadvest’s dual-listing in Mauritius and Namibia

– Mauritian retailer Compagnie des Magasins Populaires’ recently announced USD4 million rights issue

– Mauritian-listed Atlantic Leaf Properties’ USD70 million equity raising via a private placement

“These are challenging economic times for those of Africa’s economies dependent on commodities for much of their income, while so-called hot money flows out of emerging market funds investing in Africa,” says Koen Vanhaerents, Baker & McKenzie Global Head of Capital Markets.

“So it is positive to see steady progress in Africa’s equity capital markets, with a strong pipeline so early in 2016 and potentially larger deals than we’ve seen for some time.”

Hot spots

– Egypt looks set to be a particular bright spot as delayed deals come back on stream, particularly in the retail, financial services and food sectors.

– Nigeria’s pipeline looks reasonable for later in the year in the tech, telco and transport sectors.

– South Africa will inevitably see more than the two deals in the pipeline come to fruition after 9 IPOs last year.

– Mauritius continues to act as an offshore financial centre for Africa, with equity offerings such as rights issues and private placements as well as IPOs.

– London remains the key global financial centre for Africa

– The East African Securities Exchange Association is seeking to fast-track integration of their markets, which may unlock demand among issuers while increasing liquidity, with Rwanda alone predicting 3 IPOs this year.

“There’s enormous pent up demand among issuers to conduct capital raisings, particularly in Egypt, which is showing strong growth and the emergence of a larger middle class. The wider continent still faces challenges and there is little local institutional investment or retail demand other than in the biggest economies. This means larger companies have to dual-list in a global financial centre like London, as well as their home market, to avoid volatility driven by the fact that skittish international investors make up the majority of market activity,” says Edward Bibko, Baker & McKenzie Head of EMEA Capital Market Practice.


Energy, Power, Real Estate, Financial Services and Healthcare have been the most active sectors over the past five years, but increasingly Consumer Staples and now Technology are joining them as the most active sectors as Africa’s capital markets begin to broaden and deepen in tandem with a growing middle class demanding more sophisticated services.

Click to view Baker & McKenzie Africa IPO Infographic


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