Brothers enter billionaires club after I&M listing

CBK deputy governor Haron Sirima (second left) and I&M Holdings chairman Daniel Ndonye (right) look on as Dyer and Blair dealers Sheema Shah and Solomon Omundo explain a point during the the listing of I&M Holdings on the NSE June 25, 2013. Photo/Diana Ngila  Nation Media Group

By CHARLES MWANIKI

In Summary

• I&M Bank opened trading at a price of Sh93 but later rose to close the day at Sh100, leaving the Shah brothers with a combined wealth of Sh2.69 billion.
• The brothers, who are the sons of I&M Bank founder S.B.R Shah, have a combined stake of 6.88 per cent in the newly listed company, translating to 26.93 million shares.
• Tuesday’s trading left Sarit’s stake at Sh1.35 billion while Sachit closed with a Sh1.33 billion stake in a move that effectively transformed a tightly-held family business founded by their father into a public company.

I&M Holdings Limited executive director Sarit Raja-Shah and his brother, Sachit Raja-Shah, Tuesday joined the list of billionaire executives who run Nairobi Securities Exchange-listed companies as the firm closed its first day of trading at the bourse.

I&M Holdings, which is the product of listed firm City Trust Limited’s recent acquisition of I&M Bank, opened trading at a price of Sh93 but later rose to close the day at Sh100, leaving the Shah brothers with a combined wealth of Sh2.69 billion.

READ: I&M shares hit Sh103 on NSE debut

The brothers, who are the sons of I&M Bank founder S.B.R Shah, have a combined stake of 6.88 per cent in the newly listed company, translating to 26.93 million shares.

Tuesday’s trading, which was also the price discovery day, valued the newly-listed company at Sh39.23 billion.

I&M Bank was valued at between Sh39.3 billion and Sh41.2 billion before the merger according to the offer document while City Trust Limited closed trading at the NSE in the run up to acquisition at Sh2.57 billion.

I&M Holdings, the new company has 700 shareholders, still short of the 1,000 required for listing in the market’s Main Investments segment.

The NSE has granted the company a six month exemption within which it must increase its shareholder base to the 1,000.

Biashara Securities Limited, which holds a 13.92 per cent stake in I&M Holdings, has approximately 1,000 individual shareholders and subject to court and regulatory approvals will wind up to allow the investors to own shares directly in the new company, raising its shareholder base to 1,700.

“Upon completion of the transaction, the direct and indirect shareholding of Sarit S. Raja Shah and Sachit S. Raja Shah, will remain at 3.45 per cent and 3.43 per cent respectively,” the offer document said, ring-fencing the duo from any possible dilution of ownership.

Tuesday’s trading left Sarit’s stake at Sh1.35 billion while Sachit closed with a Sh1.33 billion stake in a move that effectively transformed a tightly-held family business founded by their father into a public company.

ALSO READ: I&M directors new billionaires at Nairobi bourse

The listing also put the Shah siblings in the list of NSE’s director billionaires that includes businessman Chris Kirubi (Centum Investment), Pradeep Paunrana (Athi River Mining), James Mwangi (Equity Bank), Jimnah Mbaru (Britam) and Scangroup’s Bharat Thakrar.

Mr Mbaru’s 279.3 million shares in Britam are currently worth Sh2.23 billion, Mr Mwangi’s 3.45 per cent stake in Equity is worth Sh4.02 billion while Mr Thakrar’s 18.19 per cent stake in Scangroup is worth Sh3.21 billion. Mr Kirubi owns 115.5 million shares in Centum Investment worth Sh2.51 billion.

Mr Sarit joined I&M Bank in 1993 as the executive director, having previously held a stint at Biashara Bank. He has a master’s degree in internal audit from City University London.