Bharti Airtel’s Africa business marks disappointing London stock market debut

INDIA’S Bharti Airtel owned Airtel Africa witnessed a tough start after it listed on London Stock Exchange (LSE) last week.

Shares of Africa’s second-biggest telecom operator fell 15.25 per cent from their opening price of 80 pence (p) to close at 67.8p, a disappointing stock market entry to the African arm of the Indian business with 100 million subscribers in 14 African countries.

Amid disappointing London debut, Airtel Africa raised about £595 million for the business after the offering which included a secondary listing on the Nigerian Stock Exchange. The sum is expected to be used to pare debt and pump cash to fight in a highly competitive Indian telecom market.

Airtel’s consolidated debt stands around £11.87 billion.

Unlike some other companies that have gone public in 2019, Airtel Africa is already profitable.

For the year ended March 2019, Airtel Africa posted a profit of $412m against a loss of $138m a year ago.

Chief executive Raghunath Mandava said that his Airtel Africa is the first telecommunication business to “simultaneously list on the premium segment of the London and Nigerian stock exchanges through an initial public offering (IPO)”.

The final offer included around 744.04 new shares, selling IPO size at £595m, setting a market capitalisation at roughly £3.1bn at issue. This shows around 19 per cent of the company’s issued share capital, immediately following the UK admission and Nigerian admission (including the over-allotment option), Airtel Africa said.

Earlier, Sunil Bharti Mittal founded business arm had fixed a price range of 80-100p per share for its London IPO in a bid to raise $750m, lower than the previously anticipated $1bn.