Helios Towers Raises $364 Million in IPO and Trades Flat After Making a Debut on the LSE
According to the company, the shares priced at 115 pence apiece, the bottom of the range. It rose more than 4% at one stage in early trade to 120 pence per share before settling just above the IPO price at around 116 pence by 09:30 am on Tuesday.
Earlier in August, a report by Bloomberg revealed that Helios Towers had announced plans to revive its IPO. Kash Pandya, chief executive of Helios, had explained that the decision to list signifies the company’s commitment to spreading mobile infrastructure across Sub-Saharan Africa.
He added that the sub-Saharan telecoms market was promising.
“sub-Saharan telecoms market was one of the most “high growth in the world”, citing growing demand for voice and data services among an “increasingly urbanised population”.Kash Pandya, Chief Executive of Helios
However, Helios Towers on listing, set its IPO size at $317 million which was short of the maximum $500 million target and gave the company a market capitalisation of $1.45 billion.
The company IPO values were pegged at 8.5 times earnings before interest, tax, depreciation and amortisation (Ebitda), according to a Reuters source.
The IPO was coordinated by Bank of America Merrill Lynch, Jefferies and Standard Bank while EFG Hermes and Renaissance Capital served as book-runners.
Possible reasons why Helios traded flat
Market conditions in the European IPO market have been jittery, with investor sentiment battered by expectations of a downturn in major economies in the EU, especially Germany. These concerns have pushed some companies like Kazakh fintech to postpone their listing in Europe.
In the UK, the uncertainties surrounding Britain’s departure from the European Union has also added to investors’ worries. Speculations have been about London listings suffering, especially as the October 31 deadline for Brexit nears.
In addition, the performance of Airtel Africa since listing in June could very well have raised a lingering doubt on investors’ minds. Airtel dropped 12.5% on its LSE debut and has dropped even further since.
However, Helios backed by names such as billionaire investor George Soros and Madeleine Albright should put significant confidence in investors.
Helios already shelved an IPO attempt last year. A decision which was thought to be due to the weakness in the IPO market, as well as concerns over political uncertainty in the Democratic Republic of Congo.
Despite not attaining the Maximum IPO, Helios says the funds raised will be used to roll out fourth-generation mobile services. It will also fund the building and buying of new sites, as well as potential entry into new markets.
Helios has more than 6,800 towers spread across the Democratic Republic of Congo (DRC), Ghana, South Africa and Tanzania. With the new influx of cash, they are equipped to continue their sub-Saharan expansion.
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