The Kenyan government is seeking KSh106.31bn (US$824.4m) with the IPO of Kenya Pipeline Company, which opened for subscription on Monday.

The offer is the largest in Kenya, passing the KSh50bn IPO of mobile operator Safaricom in 2008, which at the time was valued at US$765.9m on the back of a stronger Kenyan shilling.

The IPO comprises 11.81bn shares at KSh9 each, enough for a 65% free-float.

Four tranches of 20% each will be offered to domestic retail, local institutions, East African and international investors while employees will be offered 5% and oil marketing companies 15%.

Pricing gives a market capitalisation of KSh163.56bn and represents EV/Ebitda of 8.1 times, a P/E ratio of 21.8 times and dividend yield of 3.9% for the year to end June 2025.

The company reported Ebitda of KSh18.59bn in that period on revenue of KSh38.59bn.

Subscription closes on February 19 with allocations on March 4. Shares are expected to begin trading in Nairobi on March 9.

The company has been a privatisation target for some time and banks were invited in October to pitch for mandates.

The government aims to widen the company’s investor base, broaden participation in capital markets and raise revenue for spending, including on infrastructure.

KPC operates 1,342km of oil pipelines connecting Mombasa with the country’s interior, as well as fibre-optic cables, refineries and laboratory services.

Faida Investment Bank is running the transaction.

Source: IFR