Vodacom seeks to raise 500bn/- capital in historic DSE listing

ABDUEL ELINAZA

THE Capital Markets and Securities Authority (CMSA) has approved Vodacom Tanzania Prospectus, paving way for 476bn/- initial public offer (IPO), which is the biggest in the history of the Dar es Salaam Stock Exchange (DSE).

The approval makes Vodacom Tanzania the first telecoms company to list on the DSE. “We approved the prospectus on Monday… the sponsoring brokerage firm has all the IPO and listing details,” CMSA Principal Public Relation Officer, Charles Shirima told ‘Daily News’ yesterday.

According to the law, Vodacom was required to offload 25 per cent stake to the public. The long waited IPO, putting 560 million shares onto the market at 850/- a unit, is predicted of oversubscription as the firm markets itself.

The IPO will take six weeks from starting date. Orbit Securities Managing Director, Juventus Simon said yesterday that there were minor details to be corrected on the prospectus before sharing to the public.

“We will be in a position of sharing the prospectus in about three or four days after making minor corrections… bear with us at the moment,” Mr Simon said.

Vodacom controls a bigger stake of 31 per cent in the country’s telecoms market with some 12.4 million active subscribers by the end of last year. The country had over 40 million tele-subscribers by the end of 2016.

Zan Securities Chief Executive Officer, Raphael Masumbuko said would-beinvestors were waiting for the IPO since the telecom Act was passed.“People from all walks of life are waiting for this IPO. We have been in constant pressure as to when Vodacom IPO will come out.

The firm self-sales since it’s a household name,” Mr Masumbuko said. The CEO said in the two decades of DSE history, no good firm has been undersubscribed because buyers failed to purchase shares after running out of money.

“This has never happened and I don’t think it will happen this time around. The IPO will be oversubscribed. “Actually, you don’t even need a prospectus to sell Vodacom as social assumption is, it’s a well profitable firm (and I think it is),” Mr Masumbuko said.

The main sources of income for Vodacom are voice, data and money transaction via M-Pesa. The firm is the market leader in all those fronts — controls 31 per cent in voice business and 42 per cent of mobile money transaction.

DSE Insight made a hypothesis poll on twitter at the beginning of this year, tried to find out if the IPOs of three telecoms were held today, which one would attract more buyers. The poll results showed that 71 per cent will go for Vodacom, 21 Tigo and 8.0 Airtel. DSE Insight does not belong to DSE.

In recent days, the market was performing badly as investors were believed to hold their funds awaiting Vodacom IPO, sending the bourse into a bearish rally in the first seven weeks of this year.

The Tanzania Stocks Index (TSI), capturing 18 equities, dropped by negative 8.07 per cent to 3,380.25 points in a month and half since January. DSE CEO, Mr Moremi Marwa said there was a possibility people were reserving and hence halting secondary market for currently listed in favour of the upcoming Vodacom IPO.

“I meet many people who indicate that they are waiting for Vodacom,” Mr Marwa said. CMSA said they were still working with Airtel prospectus while they have returned Tigo documents asking them to correct some details especially the shareholding issue.