If it feels like Nairobi’s capital markets just cleared their throat after a very long silence, you’re not imagining it.
On Monday, the Kenya Pipeline Company (KPC), a state-owned corporation which builds, owns, and operates pipelines and storage facilities to transport refined petroleum products, listed on the Nairobi Securities Exchange (NSE).
The Kenyan government offered 65% of its shares—about 11.8 billion shares—to the public to buy into one of the country’s most visible, debt-free businesses. The offer will be broadly allocated to different groups, including Kenyan retail investors (20%), institutional investors (20%), foreign investors (20%), East Africa Community investors (20%), oil marketing companies (15%), and KPC employees (5%).
The listing, a breath of fresh air, comes after an 11-year initial public offering (IPO) drought for the NSE.
What’s different this time? Kenya’s Treasury, the government arm responsible for public finances, sold its shares at KES 9 ($0.070) each, aiming for a valuation of KES 163.6 billion ($835 million). The offer period runs for one month, longer than past IPOs, with trading on the NSE to begin on March 9. This is the largest IPO in Kenya since Safaricom in 2008 and is seen as a crucial test for investor confidence in the exchange.
It is also Kenya’s first fully electronic IPO, meaning there are no paper forms or queues.
Why now, after all this time? Kenya owes heavy debts. The government previously tried other means to raise cash, but now that it has sold off 15% of its Safaricom stake to South Africa’s Vodacom for KES 204 billion ($1.5 billion), it needs another cash cow. That’s where the KPC comes in.
Eyebrows are raised: Despite the significance of the event, critics have said that the IPO open day felt rushed, with an information memorandum that appears unfinished, inconsistent, and oddly sloppy. That sloppiness complicates the story. Is this a carefully planned IPO listing or a deal accelerated by fiscal pressure? The need for cash is real, and the asset is strong, as it reported KES 10 billion ($77.5 million) in pre-tax profit in the 2024 financial year.
