Top 100 finalists target NSE listing to boost capital

Corporate News

Nation Media Group chief executive officer Joe Muganda and DTB Bank CEO Nasim Devji during the Kenya Top 100 Mid-Sized Companies 2015 survey at the Safari Park Hotel on October 8, 2015. PHOTO | FILE 

By MUGAMBI MUTEGI, pmutegi@ke.nationmedia.com

In Summary

• Sixty mid-sized Kenyan firms that participated in this year’s Top 100 survey have plans to list on the Nairobi Securities Exchange (NSE) in the next two years to boost their profiles and capital base.
• NSE chief executive officer Geoffrey Odundo invited the companies to list at the 66-member bourse, pointing out the Growth and Enterprise Market Segment as an easy entry point.
• The Top 100 competition is open to small and medium sized enterprises that have an annual turnover of between Sh70 million and Sh1 billion.

Sixty mid-sized Kenyan firms that participated in this year’s Top 100 survey have plans to list on the Nairobi Securities Exchange (NSE) in the next two years to boost their profiles and capital base.

The annual survey, which is run by the Business Daily and audit firm KPMG, found that 30 per cent of the 200 finalists that participated in this year’s contest are seeking to tap equity investment through the bourse.

“The firms surveyed expressed a strong interest to list on the NSE within the next two to three years,” said senior KPMG manager Maurice Gachuhi in Nairobi Thursday at a luncheon for the participants.

The Top 100 competition is open to small and medium sized enterprises that have an annual turnover of between Sh70 million and Sh1 billion.

Entrants are also required to show proof of growth and provide at least three years of audited financial statements.   

This year’s competition, which was conducted between June and September, attracted 1,900 firms but only about 200 made it to the finalists’ list.

The Top 100 winners are set to be announced Friday evening at a gala dinner in Nairobi.

Financial services, health, ICT and manufacturing companies topped the sectors with listing plans, with between 31 and 45 per cent of the firms polled indicating they would be seeking equity investment through the Nairobi bourse.

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Telecoms and retail firms expressed the least interest, posting 10 per cent and 17 per cent responses respectively.

“Some business owners, however, lack enough knowledge about listing, others fear losing control of their companies while some are averse to the rigorous listing process,” said Mr Gachuhi.

NSE chief executive officer Geoffrey Odundo invited the companies to list at the 66-member bourse, pointing out the Growth and Enterprise Market Segment as an easy entry point.

He said by listing on the NSE, firms attract cheaper capital, increase their visibility and profile as well as introduce fresh ideas through new shareholders keen on growing the companies.

“A growing company should not finance itself entirely through debt, to scale up they need to get equity investment,” said Mr Odundo, one of the panelists at yesterday’s Top 100 forum.

Most (15 per cent) of the companies surveyed this year were in manufacturing, 12 per cent in wholesale, 11 per cent in retail, nine per cent in transport while infrastructure and ICT firms each posted eight per cent, marking the top five.