DAR ES SALAAM – Shares in Vodacom Tanzania Plc, part of South Africa’s Vodacom Group, rose nearly 6 percent above their issue price in their debut on the Dar es Salaam Stock Exchange on Tuesday.
Vodacom placed 560 million shares at 850 shillings each in Tanzania’s biggest initial public offering (IPO), raising 476 billion Tanzanian shillings ($213 million).
The IPO was part of government-imposed requirement for all telecom companies to list at least 25 percent of their shares locally. Foreigners, initially banned from participating, bought 40 per cent of the shares. Tanzania hopes mandatory listing of telecom companies will improve transparency and offer the public a share in the industry’s profits. Telecommunications is one of the fastest-growing sectors in East Africa’s second-biggest economy. The other two major mobile operators, Millicom subsidiary Tigo and a local arm of India’s Bharti Airtel, have also submitted prospectuses, but their IPOs are yet to be approved.
Vodacom Tanzania’s IPO was fully subscribed after Tanzania’s stock market regulator extended the offer period twice and allowed foreign investors to participate in the sale. The offer had initially been restricted to Tanzanians. “The Vodacom share price has made a modest increase after listing compared to previous IPOs of cement and cargo handling companies, which doubled on their debuts,” George Fumbuka, chief executive officer of Dar es Salaam-based Core Securities, told Reuters. “But its a good start … it gives investors a broader choice of portfolios at the local stock market.”
The number of mobile phone subscribers in Tanzania rose 0.9 percent last year to 40.17 million, driven by the launch of cheaper mobile phones in the country which has a population of around 50 million.
Editing by Katharine Houreld and Jane Merriman