Dangote opens Africa's largest IPO as the Lekki refinery sells 4.1 billion shares

Nigeria's Dangote Group opened the order book on Monday for what is set to be Africa's largest initial public offering. Dangote Petroleum Refinery and Petrochemicals FZE is selling 4.1 billion ordinary shares at 525 naira each, about 40 U.S. cents at the current rate. If the book fills, the company will raise 2.15 trillion naira, or $1.6 billion. A greenshoe of about 30 percent could lift that toward $2.1 billion.

The offer opened at 08:00 in Lagos and closes on 13 October. Trading could start in late November, the prospectus says. The minimum ticket is 10 shares, or 5,250 naira, a little more than $4. Chapel Hill Denham, one of the issuing houses, said retail buyers can apply through bank accounts and mobile platforms including Moniepoint, MTN MoMo, Airtel, Payaza, Piggyvest, Paga, Bamboo and Invest Naija.

What is being sold

The plant at Lekki, on the outskirts of Lagos, took about ten years and some $20 billion to build. It began running in 2024 and reached its nameplate 700,000 barrels a day this year. The company wants to lift that to 1.4 million barrels a day by 2029. The public sale is meant to fund that expansion.

At 525 naira a share the implied value of the refinery is about 63 trillion naira, or $47.6 billion, Reuters calculated. Forbes, using the July private placement, had put the figure nearer $42 billion and said that deal alone added about $20 billion to Aliko Dangote's fortune, taking him to $51 billion and to 36th on the magazine's real-time list. The July placement was sold as $2.5 billion and ended up raising $3.7 billion after 3.7-times oversubscription. Africa Finance Corporation was among the institutions that bought in. Dangote's stake fell to about 87 percent. The public offer, if fully taken up, would cut it to about 84.4 percent, or 83.5 percent if the extra shares are issued.

Dangote has said he expects the public book to look like the private one. That is a forecast, not a result. Allotment will be scaled if demand exceeds supply.

Why the timing is not accidental

The Lekki refinery now supplies most of the gasoline refined inside Nigeria. It has also sold jet fuel into African and European markets that lost barrels when the Iran war disrupted Gulf supply. A company that can run at 700,000 barrels a day while Hormuz is closed and a Saudi pipeline is damaged is selling a scarce product. The prospectus is a capital-markets document. The backdrop is a physical shortage.

Nigeria spent years importing fuel even as it pumped crude. The Lekki plant was sold to the public as the end of that loop. Whether a single private refinery can carry that load, and whether retail shareholders in Lagos will be patient through maintenance outages and price fights with marketers, are questions the next two years will answer. The IPO does not settle them. It does transfer a slice of the upside, and the risk, from one of Africa's richest men to anyone with 5,250 naira and a bank account.

The fine print that matters

Subscriptions are processed by SEC-approved receiving agents and electronic channels, not by the marketing site. Investors may not receive the full number of shares they request. The extra 30 percent sleeve exists so the company can soak up some of that overflow without a second offering. Books close on 13 October. Until then the price is fixed at 525 naira. After listing, the market will set it.

The offer values a plant that has been running at full capacity for only part of one year. That is a rich multiple by the standards of older refiners. It is also a bet that African and European product markets will stay tight, that Nigerian policy will not cap domestic prices in a way that starves the plant, and that the doubling of capacity by 2029 will not drown the balance sheet. Those are the three variables a buyer is paid to watch. The $4 minimum makes the experiment widely available. It does not make it cheap in valuation terms.