Dangote opens Africa's largest IPO at 525 naira a share

Books opened at 8 a.m. in Lagos on Monday for 4.1 billion ordinary shares in Dangote Petroleum Refinery and Petrochemicals FZE. The price is 525 naira a share. If the offer fills, the plant raises 2.15 trillion naira, about $1.6 billion at the 1,324-naira rate Reuters used in its fact sheet. A greenshoe of roughly 30 percent could lift the take to about $2.1 billion.

That would be the largest initial public offering Africa has recorded. The company is selling about 3.3 percent of the equity. The implied valuation sits near $47 billion to $49 billion, depending on whether the calculation uses the 525-naira sticker or the prospectus figure cited by the company. A July private placement of $2.5 billion, later described as 3.7 times oversubscribed and as having returned $1.2 billion of unallocated bids, had put the plant closer to $40 billion to $42 billion.

The minimum ticket is 10 shares, or 5,250 naira, about $4. Chapel Hill Denham's Lanre Buluro told Nigerian outlets that a buyer with a bank account, a Bank Verification Number and a phone can finish an application in two or three minutes. Approved channels named in local reporting include Moniepoint, MTN MoMo, Airtel, Payaza, Piggyvest, Paga, Bamboo and Chapel Hill Denham's Invest Naija platform. Books close on 13 October. Trading on the Nigerian Exchange is pencilled for late November.

Aliko Dangote has framed the sale as a "people's IPO." The phrase is marketing, but the structure is unusual for an asset of this size. Retail buyers sit at the front of the queue. Institutional names already took their slice in July. Forbes put Dangote's fortune near $51 billion after that placement, a jump of about $20 billion that moved him from 76th to 36th on the magazine's real-time list. The refinery now accounts for more of his wealth than cement, fertiliser and sugar combined. If the public tranche fills, his stake falls from about 87 percent to 84.4 percent, or 83.5 percent if the extra shares are issued.

The plant itself is the reason the numbers work. Built over a decade on the Lekki peninsula at a stated cost of $20 billion, it processes 650,000 to 700,000 barrels a day and reached nameplate output this year. Management wants 1.4 million barrels a day by 2029. Proceeds from the offer are earmarked for that expansion. Chief executive David Bird told Reuters the July discount reflected lock-up terms that public buyers will not face.

The Iran war changed the plant's order book. Disruptions in the Gulf raised demand for Dangote jet fuel in West Africa and in western Europe. The company now supplies most of the petrol refined inside Nigeria, a reversal of the import pattern that defined the market for two decades. That commercial fact is the under-covered part of the listing. The IPO is a financing event. It is also a bet that a single private refinery can keep taking share while seaborne product from the Gulf remains irregular.

Early demand was visible. Access Holdings chairman Aigboje Aig-Imoukhuede, speaking at the Nigerian Exchange on Monday, said billions of naira had already been subscribed by thousands of investors inside the first hour. Business Insider Africa put the first-hour figure above $7 million, or about 10 billion naira. Those numbers are small against a $1.6 billion target, but they show the retail rails work.

Allocation risk sits on the other side of that enthusiasm. If the book is heavy, applicants will not receive every share they request. The prospectus allows a 30 percent over-allotment. Dangote has also spoken of a later secondary listing in the United States. Nothing in Monday's documents locks that date.

Nigeria's exchange has listed cement, banks and telecoms for years. It has not listed a 700,000-barrel refinery that already sets domestic pump-supply terms. The valuation assumes the plant can hold utilisation, collect receivables from Nigerian buyers and keep export margins while crude and product markets stay distorted by the Gulf war. Those assumptions will be tested between the October close and the November debut.

For households putting 5,250 naira into the book, the practical question is simpler. They are buying a sliver of an operating plant, not a development story. The plant is running. The war is still moving product prices. The books stay open for 30 days.