12 May 2017

Tanzania: Vodacom IPO Ends On Optimistic Note

Vodacom Tanzania initial public offer (IPO) ended yesterday while stock brokers are optimistic of oversubscription especially after duration extension.

The leading telecom wants to raise 476bn/- through public who requested for IPO extension to extra three weeks after struggling in the first six weeks.

Zan Securities Chief Executive Officer, Raphael Masumbuko, said time extension brought a huge improvement for the entire exercise as they managed to reach more investors.

"Based on my own assessment, oversubscription is looming ... as pension funds brought Vodacom heavily. This is good sign for IPO to do better," Mr Masumbuko told the 'Daily News'.

Vodacom put on offer 560 million shares at the price of 850/- on March 9, but struggled to reach the intended amount. The telecom had to apply for an extension of extra three weeks in a bid to woe more investors.

The Orbit Securities General Manager, Mr Simon Juventus, said the extension was a big relief as more players were reached. "This time around we reached many investors unlike the first six weeks ... the progress was good," Mr Juventus said.

Orbit is the sponsoring Vodacom's IPO brokerage firm. He said many investors need more time to participate since quarter one clouded with a number of obligations for individuals and firms.

"However, at the moment I am not in a position of giving out the IPO numbers until we conclude consolidating all accounts," Mr Juventus said. Previously, Orbit Chief said the extension mainly benefits retail investors as many had family commitment and were busy during Easter holidays.

Capital Markets and Securities Authority (CMSA) had to extend the period following Vodacom plea that if IPO ended on April 19, as planned, many retail and institution investors will be left out.

CMSA Principal Public Relations Officer, Mr Charles Shirima, told the 'Daily News' the go ahead was given based on the amount and size of the IPO before the public.

But other market pundits have it that liquidity tightness that the economy currently experienced had a share of blame for underperformance of the huge IPO in a two-decade history Dar es Salaam Stock Exchange (DSE).

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