Africa’s largest initial public offering (IPO) to date has closed with strong demand from investors, according to the company. Dangote Refinery and Petrochemicals FZE’s 44-day IPO ended with orders nearly three times higher than the target of $1.6 billion.
Reuters reported preliminary orders in the region of N6.4 trillion ($4.78 billion) from retail and institutional investors in Nigeria alone. The company’s president and chief executive, Aliko Dangote, said subscribers from 120 countries and all of Africa’s 54 nations have sought to buy into the IPO.
IPO Details
The IPO is for the company that owns and operates the 700,000 barrels per day oil refinery at Lekki in Nigeria. Among the tasks facing the company and its financial advisers in the coming weeks is working out the allotment of shares. A decision before the regulator, Nigeria’s Securities and Exchange Commission, is how much oversubscription to allow in light of surging demand. Reports suggest that the offering size could swell to as much as $2.1 billion, which is a significant increase from the initial target.
The company must now determine how to allocate the shares, a process that will be closely watched by investors and regulators. The Nigerian Securities and Exchange Commission will play a key role in this process, as it must approve the allotment of shares.
Reaction to the IPO
He continued, ‘This IPO proves another critical point: Africans are willing to invest in and benefit from industries they themselves develop.’
The IPO broke through Africa’s scattered financial systems to attract investors across the continent. Authorities in Kenya, Ethiopia, Botswana, Zimbabwe, and Rwanda created special programs, allowing local investors to participate using their own currencies. These measures helped drive broader engagement and higher demand for the offering.
Future Plans
Dangote’s track record of turning business concepts into widely supported ventures is now opening opportunities for his other projects. A separate Dangote company is constructing a $16 billion refinery in Lamu, Kenya, with production expected to start around 2030—aiming to boost regional energy production and stability.
Dangote also revealed last week that he has acquired a 24.76% stake in the Kenya Pipeline Company at a cost of $327 million. At the heart of Dangote’s plans is a bid to ensure energy security across Africa by building on lessons from the disruptions caused by the war in the Middle East, a major source of supply for countries in the continent.
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