Karl Toriola
Karl Toriola, CEO, MTN Nigeria


Many investors seem to be interested in securing a slice of MTNN in the ongoing Initial Public Offering exercise, BH has learnt.

‘’Who wouldn’t’’, one investor quipped, when asked if he was also interested, and then added: ‘’do you knows what owning a share of MTNN means given its status and performance?’’

People are reminded everyday that the company offering which will end on December 14, 2021 is priced at N169 per share. However, this comes with an incentive that includes one free share for every 20 shares purchased and is capped at 250 free shares per investor. Note that this incentive is open to retail investors who buy and hold the shares for at least 12 months, post allotment.

The company is set to raise $246million (N101bn) through offering 575 million shares to the public.
In a statement the group noted it was the “first step in our previously communicated statement of intent to sell down approximately 14 per cent of MTN Group’s current shareholding in MTN Nigeria.

“Today we announce our intention to proceed with a public offer for sale of up to 575 million shares in MTN Nigeria, by way of a bookbuild to institutional investors and fixed price to retail investors,” the company said in a notice filed with the Nigerian Stock Exchange.

The offer which opened in November 2021 with a bookbuild to institutional investors, after which a fixed price was announced for retail investors also in November 2021. The offer which closes in December 2021 will see its holdings in MTNN reduce from 76% to 62%.

If the company achieves this it would have met its target of selling more than 30 per cent of its stake to retail investors , an amount higher than the statutory minimum floatation of listing companies on NSE.

Hours after the announcement, the stock rose around 8% to ₦191 from N175.60.

MTN had shelved its plans to raise $500million in 2018 before it listed by introduction two years ago. The company had said the macro-economic conditions were not conducive for such a venture at the time.

The company eventually listed its Nigerian business in Lagos two years ago at 90 naira each, becoming the second-largest stock by market capitalisation. In March 2020, MTN Nigeria shares fell back to the listing price due to lockdowns to slow the spread of the coronavirus.
What is giving MTNN the boldness to do a public offering when others are afraid,


Analysts reckon that MTN Nigeria is one of Nigeria’s most profitable publicly-traded companies and consistently pays dividends to investors.

With a dividend payout of N9.40 in 2020 and with the company consistently distributing 80% of its profits annually to investors, the stock provides the perfect source of passive investment income.

There is an incentive of 1 new share for every 20 purchased which is however capped at 250 free shares provided the shares are held for 12 months.

MTN Nigeria is a clear market leader with strong and competitive advantage; it has huge growth potential.
The company operates under experienced management & has a solid corporate governance framework.
Nigeria provides an exciting demographic opportunity with its youthful population and a fledging social media culture which MTN Nigeria is well-positioned to take advantage of.

In addition, MTN Nigeria grew its profit before tax by 51.9 per cent to N321.35billion in nine months of 2021 from N211.59billion in nine months of 2020, to becoming second most profitable company on the NGX.

CEO, MTN Nigeria, Mr. Karl Toriola said the telecommunications giant in the first nine months of 2021, continued to enhance its resilience of the business, improve performance and make good progress towards Ambition 2025 strategy. “Overall, service revenue continues to grow, increasing by 23.7 per cent, ahead of the rate of inflation and supported by voice revenue growth of 10.6per cent and accelerated data revenue growth of “In addition, our focus on cost management through our expense efficiency programme, combined with service revenue growth, led to a 1.6pp EBITDA margin expansion to 52.6 per cent and translated into an increase of 51.9 per cent in PBT.” he said.

For the first half of the year, ended June 30, 2021, MTN service revenue hit N790.3 billion, an increase of 24.1 per cent.

Its profit before tax (PBT) of N215.1 billion and profit after tax (PAT) of N141.8 billion in its half-year (H1) operations. The financial report showed pre-tax profit growth of N215 billion, representing a 54.1 per cent increase, while profit for the period soared by 49.5 per cent to N141.827 billion.

The firm recorded a profit before tax of ₦298 billion, making it Nigeria’s biggest telecoms player as the company added 12.2 million subscribers.

Research revealed that its subscriber base hit 76.5 million active miles ahead of Airtel, which said in February that it has 44.4million subscribers. MTN’s active data users also increased by 7.4 million which brings its total number of active data users to 32.6 million.

The entrance of the big mobile telecommunications companies into the financial services space which is generating serious interest and discussions in the banking industry, is going to boost its market share.

While some players in the industry believe the move would complement the banking services for efficiency, others fear that it may eat into their businesses and market share.
Whatever, may be the case experts are wont to believe the development might alter the shape of banks in terms volume of business,competitiveness among other factors.


Since the market crash of 2008 that eroded the confidence of investors when they lost almost 70 per cent of their investments, the equities market is yet to boom at that level again. Companies have become more careful and have used more of other sources of funding than public offerings. Four years before 2019 there was IPO drought in the NGX.

Recently, in 2019 as Skyway Aviation Handling Company (SAHCOL) Plc did its offer for sale of 406.1 million shares valued at N1.89 billion in April 2019, albeit undersubscribed by 35%. Similarly, as at late 2020, no IPOs had been recorded for the year 2020, mainly due to the impacts of the COVID-19 pandemic and the macro-economic concerns of investors.

“Initial Public Offering (IPO) activity in the year remained mute as prospective issuers weighed market volatility and valuation concerns amid the pandemic. However, the value of supplementary issues increased dramatically from the previous year, rising by 851.37% to N1.42 trillion, from N148.77 billion in the previous year. This includes the listing of BUA Cement Plc., which resulted from the merger between the BUA-owned entities, Cement Company of Northern Nigeria (CCNN) and Obu Cement Co., and saw BUA cement emerge as the third largest company on the NSE by market capitalization, with a valuation of N1.18 trillion.” Said Mr. Oscar Onyema, Group CEO, NGX group at the 2020 Market recap/ 2021 outlook

These concerns were caused by the several factors. Notwithstanding, not many Nigerians are optimistic that the economy of the country has much to offer them given the excruciating pains pervading the environment and the general state of affairs. While many believe that the politics of the country is incapable of creating an enabling atmosphere to nudge the economy forward, others have listed mis-governance, high insecurity, lack of productivity among others for losing hope in the growth trajectory of the economy.

The challenges are numerous, a former managing Director of one of the big banks who would not want to be mentioned in print told Business Hallmark.

Compounding this is the negative impact of Covid-19 which joined other factors in ensuring that Nigeria plunged into a recession in the second quarter of 2020. However, the economy slowly rallied to grow by 0.11 per cent at the end of the fourth quarter; grew again by 0.51 in first quarter 2021 and then by a COVID-reversing 5.1 in second quarter of 2021, up from a -6.1 negative position in 2020.

Yet this does not change the pessimism of many who believe the economic managers and the government are still not on the right path more so when other core economic fundamentals remain largely southward.

Going to deeper grounds, recent statistics reveal that the rate of unemployment, the second highest in the world is 33%. At the same time, the underemployment rate stood at 22%; even as inflation, which had hit above 18 per cent earlier in the year is still high at 16.01 per cent. At the same time, Nigeria has accumulated a total debt stock of N36trillion which is even still growing. Recall that Last year, MTN group was unable to repatriate its $280 million dividend from its Nigerian subsidiary due to the challenges of securing foreign currency, amid the country’s forex liquidity crisis.

MTN had negotiated down to $3.2billion a fine of $5.2billion for not meeting the deadline set up by the Mobile network operations (MNOs) for disconnecting the Subscribers Identification Modules (SIM) with improper registration. ‘’On 10 June 2016, MTN announced through its chief executive officer, Ferdi Moolman, that the sum of N300bn (less than $1 billion) had been accepted as the final settlement of the fine demanded by FG for not disconnecting unregistered lines from its network by the deadline giving by NCC to all MTOs in the country’’ noted Wikipedia


Many are wont to believe that MTN has all it takes to raise the huge amount it is looking for as well as have its shares fully subscribed. The company which listed on the exchange only two years ago has proved to be strong, with strong fundamentals.
A giant company with huge muscles and the largest subscriber in the telecoms industry; many want to share in the successes of the company by becoming part owner. Experts also reckon that the market has been more bullish than bearish this year.

Not deterred by other challenges, the equities market which gained over 50per cent at the end of business year 2020 and is still looking impressive in the third quarter 2021 extending to the fourth quarter. As at Friday October 29, 2021 the All share index closed higher by 0.2 per cent to 42,049.35 from 41,961.14 points on Thursday October 28,2021. In the last five months the market has appreciated 12per cent and more companies are recording good results than in 2020.

Whereas analysts seem divided on the fundamentals of the market but they posited that various reasons responsible for the bullish disposition of the market. But majority of them believe that any time the price of crude rises as the case presently that crude price is $80pbd and above investors in Nigeria become hopeful and encouraged. Others have also pointed that the fact that the economy was recording growth no matter how small could be enough encouragement to invest in the market. There is also a consensus that the Nigerian market is always attractive given that stock prices are cheap compared with stocks in the developed economies.

Interestingly, the market appears to be garnering momentum again given impressive results that are trickling in from companies in the second quarter 2021. Most banks and other firms are also paying good interim dividends in the period ended June 31, 2021.

Evidently, the reading is that MTN will ride on this to sell its shares. But is it that simple? And how much would its new status as a banking sector player fit into this equation? We wait.


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