Airtel Money shares muted in biggest London IPO in five years
Airtel Money shares were muted after the firm it kicked off trading on the London Stock Exchange in the largest initial public offering in the City for five years.
The mobile payments firm has priced its shares at £1.96 apiece, which hands it a price tag of around £5.3bn. Existing shareholders, which include the Qatar Investment Authority and Mastercard, have offered up 270m shares, raising around £529m.
The fintech’s stock opened flat before rising two per cent and then tumbling into the red, down one per cent.
A successful flotation would open the door for a spot in the FTSE 100. Airtel previously said it expects to have a “free float that would make it eligible for inclusion” in the FTSE indices.
The London Stock Exchange has not managed to land an IPO north of £1bn since 2021, when Deliveroo and Wise each floated at valuations just shy of the £8bn mark. Deliveroo has since delisted following its takeover by US-based Doordash, meanwhile Wise has downgraded its listing after switching its primary venue to New York.
The International Finance Corporation, a private-sector arm of the World Bank Group, has taken a £67.2m cornerstone stake in the Airtel IPO with around 34m shares. UK retail investors have been allocated 8m shares through investment platform Retail Book.
The fintech’s parent company, telecommunications giant Airtel Africa, is majority-owned by Indian billionaire Sunil Mittal’s Bharti Enterprises and is Africa’s third-largest wireless carrier. It listed on the London Stock Market in July 2019.
Suneel Hargunani, head of EMEA equity capital markets syndicate at JP Morgan, told City AM the listing was a “cross-section of potential interest”.
“The IPO essentially showcases that in terms of the demand that we got. UK Long Only, Emerging Market, and fintech money as well. It benefited from the cross-section of both its sector and its geography.”
Airtel Money hails ‘new chapter’ on London market
The fintech has grown rapidly in recent years and now boasts over 50m customers. Payments giant Mastercard holds a stake of just shy of four per cent in the firm following a $100m investment back in April 2021 that valued the business at $2.7bn.
“Our listing in London marks an important new chapter for our business and reflects what we have built across Africa and the significant opportunity ahead,” Ian Ferrao, chief executive at Airtel Money, said.
He added the listing was a “beginning, not a destination”.
“As a listed company, we will remain focused on building Africa’s leading digital financial services platform, connecting more people and businesses to the formal financial system and helping accelerate the continent’s transition towards a more inclusive, digitally connected economy.”
The listing is hoped to help unlock a pipeline of new listings for London, particularly in the fintech sector, where ministers and stock exchange officials have courted top firms in the hopes of landing more public floats.
Hargunani said it would be a “checkpoint for the overall IPO market”.
“I wouldn’t necessarily narrow it just on fintech… I think this is more a barometer for the IPO market or a sense check for anyone who’s looking to come to the market, i.e. how best to do it and what the outcome is but each deal will need to be assessed individually rather than getting a strong tailwind from this.”
Earlier this month, payments firm Zilch kicked off the first steps towards its long-anticipated public offering. City AM understands the firm is leaning towards the London Stock Exchange for a listing that is hoped to fetch a potential $2bn valuation.