IHS Towers share price dropped by 18% after first day of its NYSE listing 

IHS Towers, one of the largest independent owners, operators, and developers of shared telecommunications infrastructure in the world listed on the New York Stock Exchange (NYSE) on Thursday with a minimum price of $21 per share.

However, the company’s share prices would later drop by 18% from the $21 when it initially began trading to $17.12 by midday on its first day of trade.

This was lower than expected but the company was still able to raise $378 million to fund growth plans, according to reports from Bloomberg.

IHS Towers’ earlier issued its share price at between US $21.00 and US $24.00 per share, according to its SEC form F-1 filing with the US Securities and Exchange Commission. This puts the company at a potential valuation of $7bn.

What you should know

IHS Towers attempted to issue an Initial Public Offering (IPO) in America for the first time in 2018. But market attitudes were not favourable at the time and the deal fell through.

The tower company, which operates in nine countries across the globe, will sell a total of 22.5 million ordinary shares in its first public offering. 18 million of these shares will be issued by IHS Towers itself and 4.5 million by selling shareholders.

RBC Capital Markets, LLC, Barclays Capital Inc., and Absa Bank Limited are acting as joint book-running managers for the transaction. Goldman, Citi, and JPMorgan are acting as joint lead underwriters.

The company manages more than 30,000 towers in its existing portfolio. Its telecom infrastructure makes it possible for millions of people around Africa and beyond to make phone calls and browse the internet.

Partly owned by MTN

A significant 29 per cent of IHS Towers stakes are held by South Africa’s MTN. Additional stakes are held by Goldman Sachs, Emerging Capital Partners (ECP), African Infrastructure Investment Managers (AIIM), FMO (Netherlands Development Bank), Ninety One and Wendel- the French private equity investor.

Technext reported in January 2020 that MTN might be looking to sell up to 14% of its Lagos-listed operation. IHS Holdings Ltd. was on that list. This was part of its $1 billion three-year asset-disposal plan. According to an MTN spokeswoman, the value of MTN’s stake in IHS Towers was about $1.5 billion at the time.

The fresh IPO will see MTN holding 85,176,719 ordinary shares. The offering is scheduled to close on October 18, 2021, subject to meeting up with satisfactory closing conditions.

The Lagos-based company was founded in 2001 by Sam Darwish. It operates in the sub-Saharan countries of Nigeria, Zambia, Ivory Coast, Cameroon, and Rwanda. It also has footprints in the Latin American countries of Brazil, Colombia, and Peru as well as the Middle East country of Kuwait.

IHS describes itself as one of the largest independent tower operators in the world, servicing mobile network operators like MTN, Orange, Airtel, Etisalat, Millicom, Zain, and Vivo.

The company reported adjusted earnings of $490 million and a profit of $77 million before interest, taxes, depreciation, and amortisation in the first six months of the year.