Vodacom Tanzania extends its IPO period by three weeks

VODACOM Tanzania, a subsidiary of South Africa’s Vodacom Group, has extended the initial period for its initial public offering (IPO) by three weeks to give local investors more time to take part in the share sale, an official from the market regulator said on Tuesday.

The company’s plan to raise 476 billion shillings (R2.81bn) by selling 560 million shares at 850 shillings each is Tanzania’s biggest ever share sale. The IPO is only open to local investors, though foreign investors can take part in the secondary market.

The offer period, which was initially scheduled to end yesterday, will now run to May 11 and the market listing is likely to take place on June 6, Charles Shirima, a spokesperson for the Capital Markets and Securities Authority (CMSA), said.

“The extension of the IPO is nothing unusual… it is aimed at giving Tanzanians more time to take part in the share sale,” Shirima said.

Extension Analysts said the extension of Vodacom’s IPO period followed a late surge in demand for shares from domestic retail investors.

“There has been a huge demand for the shares as we approached the last days of the IPO period and many investors called for an extension of the IPO,” Juventus Simon, general manager of Orbit Securities, said.

The country’s eight telecom operators are required by law to have 25 percent local ownership via a stock market listing.

The government hopes the listings will bring more transparency and offer the public a share in the industry’s profits.

Tanzania, East Africa’s second-biggest economy, posted a 0.9 percent annual increase in the number of mobile phone subscribers in 2016 to 40.17 million. As in other African countries, mobile phone use has surged in Tanzania over the past decade, helped by the launch of cheaper smartphones.

The other two major operators, Millicom subsidiary Tigo and a local unit of India’s Bharti Airtel, have also submitted their prospectuses to the capital markets regulator for IPOs to comply with mandatory listing regulations, according to the CMSA.