Dubai-led Airtel Money to list on London Stock Exchange

• Fintech to sell at least 10% of stock
• War guided against local listing
• $350m net profit last year

African fintech Airtel Money, whose management team is based in Dubai, will sell at least 10 percent of its shares and list on the London Stock Exchange (LSE) in a secondary offering, the company has said.

Airtel Money is the brand name of Airtel Mobile Commerce (AMC), which is a subsidiary of Airtel Africa, the continent’s second-largest telecom operator.

AMC had considered joining stock markets in the Middle East, mainland Europe or North America before opting for London, CEO Ian Ferrao told AGBI.

“London [has] deep capital available, all the global institutional investors are already present. Emerging-markets fintech and our types of businesses are very well understood [among] this investor pool,” he said.

“Middle East stock exchanges are fantastic, they have a lot to offer, [but] right now London makes more sense for us. Some of the market disruptions earlier this year also guided us to say, ‘OK, let’s go to London at this time’.”

Asked whether he was referring to the Iran war, Ferrao said “Yes”.

AMC is a Netherlands-based holding company, while its management subsidiary is based in Dubai. It runs Airtel Africa’s mobile financial services businesses across its parent’s footprint – which spans 14 countries including Nigeria, Kenya and Tanzania – and owns most of these.

State-run Qatar Holding and Abu Dhabi’s Lunate own 8 and 2 percent of AMC, respectively. India’s Bharti Airtel holds 78 percent, while other minority shareholders include Mastercard and US private equity company TPG.

Some minority shareholders will sell their stock in the secondary offering, although Ferrao declined to specify which or how much money this was likely to raise. Dubai’s Emirates NBD Capital and First Abu Dhabi Bank are among the joint bookrunners.

“We’ve got good momentum on our side. We’ve done a lot of investor outreach in the UAE, London, New York, South Africa, Singapore. We’ve got strong feedback from investors. So we’re feeling confident,” he said.

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AMC made an annual “net result”, commonly regarded as net profit, of $350 million in the 12 months to March 31, up from $211 million a year earlier.

Airtel Money will publish the share prospectus shortly, with the sale conducted soon after, so that the company lists on the LSE sometime in October, Ferrao said.

The flotation will “give us flexibility to execute on our ambition to be Africa’s largest fintech [and] will give investors exposure to Sub-Saharan Africa fintech”, he added.

The sale is open to institutional investors worldwide, plus UK-based retail investors.

“We have strong relationships within the investor community and the sovereign funds, both Abu Dhabi and Dubai,” Ferrao said. “We think participation will be strong among them because they know the brand.”

Airtel Africa’s mobile revenue totalled $404 million in the three months to June 30, up 39 percent year on year. Over the same period, its mobile money subscriber base grew by 23 percent to 56.5 million and its average revenue per user – an important industry metric – rose 4 percent.

Mobile money provided 22 percent of Airtel Africa’s quarterly revenue.