Airtel Uganda has announced that it is more than doubling the incentive shares that it is giving to prospective shareholders who are buying shares through its initial public offering (IPO). This means that retail investors can now get up to 17% discount on the total shares obtained while institutional investors can get as much as 53% discount through the incentive shares.
The new incentive structure is as follows: (For every 100 shares purchased).
Applications of between 40 million and 200 million shares: 20 free units per 100 shares.
Applications of between 200 million and 400 million shares: 30 free units per 100 shares
Applications of between 400 million and 2.85 billion shares: 80 per 100 shares.
Applications above 2.85 billion shares: 112 per 100. The biggest winners are institutional investors in this category getting almost 53% discount at the current valuation price of the company.
This is a significant increase in the number of incentive shares that are on offer.
Communication from Airtel
What does this mean for Ugandan investors?
The doubling of the incentive shares is a new development for Ugandan investors. It means that they can now get more shares for less money. But this might also signal the actual valuation price of the company especially when the company goes public.
Discount computation of the different classes of Shares.
Discount prior to today’s announcement.
Discount after today's announcement.
If you enjoyed this letter, please consider sharing it with your friends and families,
I hope you have a great week and potentially invest in Uganda’s Capital Markets.
Alex Kakande