Dangote Opens Sh49 Share Offer to Kenyans Through NSE
Kenyan investors will soon be able to buy shares in Dangote Petroleum Refinery through the Nairobi Securities Exchange (NSE), with the minimum investment set at about Sh490, subject to regulatory approval.
The new arrangement will allow investors to access the ongoing Dangote refinery initial public offering (IPO) through global depository receipts (GDRs), which will be priced at Sh49 per share.
GDRs allow investors to own shares in a foreign company without having to trade directly on an overseas stock exchange or open a foreign brokerage account.
Renaissance Capital will issue the GDRs to Kenyan investors, with each receipt representing underlying Dangote shares listed on the Nigerian Exchange (NGX). Stanbic Bank will act as the custodian and purchase the Dangote shares, which will then be packaged into GDRs for investors to trade on the NSE.
The arrangement is expected to make it easier for Kenyan retail investors to participate in the Dangote IPO. Currently, investors seeking to buy the shares through local stockbrokers with links to Nigerian brokerages face a minimum investment of up to Sh259, 520.
The proposed GDR offer is expected to receive regulatory approval in early October. If approved, the offer is planned to run from October 5 to October 13, in line with the closing of the Dangote IPO in Nigeria. The GDRs are expected to begin trading on the NSE on December 8.
Renaissance Capital Kenya Chief Executive Officer Stanley Kariuki said the Kenyan offer will follow the Nigerian IPO structure, where investors can purchase a minimum of 10 shares for just under Sh500. The company has already seen interest from both retail and institutional investors.
The value of the GDRs will move in line with Dangote shares traded on the NGX. Dividends earned from the underlying shares will be distributed to GDR holders through the sponsoring broker and custodian bank.