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

Africa's largest share sale opened at 8 a.m. in Lagos on Monday. Dangote Petroleum Refinery and Petrochemicals FZE is offering 4.1 billion new ordinary shares at 525 naira each, about 40 US cents at the current rate. If the book fills, the plant raises 2.15 trillion naira, or $1.6 billion. A greenshoe of about 30 percent could lift that toward $2.1 billion and take the issued total near 5.3 billion shares. Books close on 13 October. Trading is slated for late November.

The offer is a primary issue. The money goes to the company, not to selling shareholders. The new paper is about 3.3 percent of the enlarged capital. The implied valuation of the refinery is about $47 billion to $49 billion once the new shares are counted. Aliko Dangote, who controls the group, sold $2.5 billion of stock in a July private placement that was 3.7 times subscribed and ended up placing about $3.7 billion before $1.2 billion was returned to keep shares for the public book. That sale cut his stake to about 87 percent. The public offer, if taken up in full, would take it to about 84.4 percent, or 83.5 percent if the extra shares are issued.

Forbes now puts Dangote's fortune near $51 billion after the private placement, up about $20 billion on the higher valuation, and ranks him 36th among the world's richest people. The Lekki plant, which cost about $20 billion and took a decade to build, accounts for most of that wealth. It processes 700,000 barrels of crude a day and reached full capacity this year. The company wants 1.4 million barrels a day by 2029. Proceeds from the IPO are earmarked for that expansion.

The marketing line is the IPO for the People. The minimum ticket is 10 shares, or 5,250 naira, roughly $4. Applications run through approved digital channels: Moniepoint, MTN MoMo, Airtel, Payaza, Piggyvest, Paga, Bamboo and Chapel Hill Denham's Invest Naija platform. Lanre Buluro, managing director of investment banking at Chapel Hill Denham, said a buyer with a bank account, a Bank Verification Number and a phone can finish the form in two or three minutes. Allotment is not guaranteed if the book is oversubscribed. Dangote said last week there is no segregation on who can own these shares. We want everyone to own a share.

Nigeria has imported most of its petrol for years even as it pumps crude. The Lekki refinery is the first large attempt to reverse that. A public float that small, at a valuation this high, does not transfer control. It does give retail accounts a line into a plant that already sets domestic product prices in practice. It also tests whether Nigerian digital wallets can clear a book of this size without the old brokerage queue.

Investors who want the paper should read the prospectus. The plant's cash flow depends on crude supply, product prices, naira liquidity and the state's willingness to let a private refiner keep import-substitution rents. The July book showed institutional demand. The September book will show whether a 10-share ticket pulls in households that have never held an industrial name. If it does, Dangote gets cheap expansion capital and a political fact: millions of small holders with an interest in the plant staying open. If it does not, the greenshoe sits unused and the story stays with the institutions that already bought in July.

The official site lists price, minimum size, dates and the warning that subscriptions go only through SEC-approved receiving agents. Trading, if the timetable holds, starts after the October close and the November listing window. Until then the only number that matters is how many of the 4.1 billion shares get taken up at 525 naira.

Retail demand will also test the naira's plumbing. A household that pays 5,250 naira through a mobile wallet is making a different bet from a development-finance desk that took the July placement. Both bets price the same plant. Only one of them will decide whether the phrase people's IPO is a description or a slogan. Chapel Hill Denham and the receiving banks will publish subscription figures after 13 October. That table, not the opening ceremony, is the result.