Interswitch Tried A Dual IPO Two Years Ago – It’s Second Attempt Is Now Underway
Nigeria’s digital payments startup Interswitch is regarded as the bedrock of the West African country’s financial infrastructure. The fintech firm attempted an Initial Public Offering two years ago and apparently failed, but it is planning to list on the London Stock Exchange and Lagos Stock Exchange by the end of the year, as it hires investment bank JPMorgan.
Last week, WeeTracker reported that JPMorgan is looking to hire African talent in order to checkmate the growing trend of companies from the continent listing in London. Interswitch was previously held back for foreign exchange blips, but it hopes to put all things in place to complete its dual listing before the year runs out.
In December 2016, it was reported that Interswitch had to hold off on its plans to raise a staggering USD 1 Bn IPO round. Investors were worried about the further potential weakness of the Nigerian naira and a shortage in foreign currencies, especially the dollar.
The listing would have been done with the Bank of America Corporation, Barclays Plc and Standard Bank Group Limited. It would have also enabled the fintech’s chief investor, Helios Investment Partners to reduce its shareholding in the company.
According to Mitchell Elegbe, Interswith’s CEO, the delayed IPO was due to Nigeria’s deteriorating macroeconomic conditions and the air of uncertainty that hovered around the exchange rate. He said the situation made investors jittery about the naira exchange rate and whether they would have been able to buy foreign-exchange to get their money out of the country.
In the wake of questions regarding what was supposed to be Africa’s first public startup unicorn – Jumia overtook them – Interswitch finally said it had plans to conclude the IPO before the end of this year.
Bloomberg reports that the company has hired advisers to rejuvenate listing plans, including Citigroup Inc. The same report says that the offering may leave the firm with a USD 1.3 Bn to USD 1.5 Bn valuation.
Listing in the U.K and in Nigeria at the same time is not new to African companies. Last month, Airtel Africa, a wireless carrier spinoff from India’s Bharti Airtel, pulled off the same kind of IPO.
Meanwhile, a financial services group from Mauritius known as Bayport Management Ltd revealed in June that it is also considering to go public. There are no less than 111 African companies listed on the London Stock Exchange, all of which account for over USD 149 Bn.
While Kenya’s Safaricom-run M-Pesa could easily be mentioned in Africa’s digital finance discussions, it is important to note that Nigeria is considered to be the continent’s most significant revenue opportunity.
This owes to its ranking as Africa’s most populous with more than 190 million people and its status as the continent’s largest economy (USD 375.8 Bn). Reports say that consumers in the country spend no less than USD 400 Mn annually, and will generate USD 75 Bn e-commerce revenue by 2020.
