(Bloomberg) — Quick Mart Plc saw demand for shares in its initial public offering exceed the number available by almost 23% as Kenya’s second-biggest supermarket chain concluded the nation’s second IPO of the year.
Investors applied for 2.45 billion shares at 7.50 shillings each in the Nairobi-based company while 2 billion were on offer, it said in a statement on Friday. The firm got 18,492 applications.
“The board is delighted with the strong response,” Quick Mart said.
The sale is a sign of a tentative revival in Kenyan equity-capital markets where there have been few listings. Quick Mart is only the second company to pursue an IPO this year in Nairobi after state-run Kenya Pipeline Co.’s offer. Rising share prices have helped to create a more favorable backdrop for investors, with the nation’s benchmark stocks gauge gaining 28% in dollar terms this year, placing it among the 10 best performers globally.
Just over 18,000 Kenyan and East African retail investors received a full allocation of 119.6 million shares, while 44 foreign buyers got about 236 million shares, or just under half the number sought.
Four so-called cornerstone investors are supporting the transaction, including Redwheel Group’s RWC Asset Management LLP and 337 Frontier, an investment adviser set up in 2016 that’s focused on frontier African equities. The World Bank’s International Finance Corp. and the UK’s Foreign, Commonwealth and Development Office — via its Mobilist program — are the other two.
Quick Mart’s current investors are using the IPO to reduce their stake, drawing attention to the exchange as an exit route for private equity funds, a rarely used path in Kenya. The company won’t issue new stock or receive proceeds from the offer.
The sole owner, Sokoni Retail Kenya Ltd., is selling half of its stake. Sokoni is the vehicle through which the business’s founder, John Kinuthia, and Adenia Partners hold their interests, with the Mauritius-based firm having a controlling stake.
Following the completion of the offer, the four cornerstone investors will hold 21.6% of the company’s shares, while Kenya and East African institutional investors will have 17.5%. Regional retail buyers will get 5% and foreign investors 5.9%.
Quick Mart shares will begin trading on the Nairobi Securities Exchange on Nov. 12.
Standard Bank Group Ltd.’s Stanbic Bank and Stanbic Securities acted as lead transaction advisers, placing agents and sponsoring brokers.
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