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

Books opened on Monday for 4.1 billion new ordinary shares in Dangote Petroleum Refinery and Petrochemicals FZE, priced at 525 naira each. If the offer is fully taken it will raise 2.15 trillion naira, about $1.6 billion at the 1,324 naira exchange rate Reuters used on the day. A greenshoe of up to about 30 percent could lift proceeds toward $2.1 billion. The books close on 13 October. Trading is pencilled in for late November on the Nigerian Exchange.

The sale is a primary issue. The cash goes to the company, not to selling shareholders. The new paper is about 3.3 percent of the enlarged capital. Aliko Dangote, who still holds the rest after a July private placement, has called the deal a people's IPO. The minimum ticket is 10 shares, or 5,250 naira, roughly four dollars.

That floor is the point of the marketing. Chapel Hill Denham, one of the issuing houses, said a buyer with a bank account, a Bank Verification Number and a phone can apply in two or three minutes through channels that include Moniepoint, MTN MoMo, Airtel, Payaza, Piggyvest, Paga, Bamboo and Invest Naija. Allotment is not guaranteed if the book is oversubscribed.

What the plant is worth on paper

The 525 naira price implies a valuation near 63 trillion naira, or about $47.6 billion, on the Reuters factbox math, and closer to $49 billion once the new shares are counted, according to the prospectus as summarised by reporters who read it. In July the group sold a slice through a private placement that Reuters said raised $2.5 billion for about 6 percent of the plant at a $40 billion valuation. Forbes later wrote that the book was 3.7 times covered and that $1.2 billion was returned so some stock could be kept for the public sale.

That private round cut Dangote's stake to about 87 percent and, on the Forbes real-time list, lifted his fortune by about $20 billion to $51 billion. If the public offer is taken up in full his holding falls toward 84 percent. CEO David Bird told Reuters the private buyers accepted a discount because of lock-up terms that the retail book does not carry.

The refinery itself took ten years and about $20 billion to build on the Lekki Free Zone east of Lagos. Nameplate capacity is 700,000 barrels a day. It started running in 2024 and reached full rates this year. It now accounts for more of Dangote's wealth than his cement, fertiliser and sugar lines combined.

War margins and a possible New York line

Reuters reported that supply shocks tied to the Iran war have helped the plant sell jet fuel into western Europe. That is a change from the years when Nigerian petrol still arrived as an import while the new stills were being finished. The IPO cash is earmarked for expansion of the same site, not for a dividend.

Dangote has also said a secondary listing in the United States could follow. No timetable was attached to that remark on Monday. For now the legal home of the offer is Lagos, under a prospectus that warns buyers to read the document and, if needed, speak to an issuing house or broker before they subscribe.

Africa has not seen a larger IPO. That record will stand even if the book is only partly filled, because the marketed size already clears earlier continental sales. Whether the retail rush matches the slogan is the open question for the next four weeks. The minimum lot is small enough that millions of accounts can apply. The plant is large enough that 3 percent of it is still a $1.6 billion cheque.

Investors who do apply will own a refinery whose earnings now move with diesel and jet cracks that have been distorted by attacks on Gulf and Russian energy sites. That is the information the prospectus has to carry, and it is the risk that sits under the 525 naira print.