Vodacom Tanzania’s IPO Gets The Green Light

Vodacom Tanzania, the leading mobile network in Tanzania has received the green light today to have an initial public offerings (IPO) as mandated by the Government of Tanzania for all telecommunications companies operating there.  Vodacom Tanzania’s Managing Director Ian Ferrao confirmed that the Capital Markets & Securities Authority (CMSA) has approved Vodacom Tanzania’s prospectus ahead of the IPO and subsequent listing of 25% of its shares on the Dar es Salaam Stock Exchange (DSE).

The CMSA approved the Vodacom Tanzania offering of 560 million shares to the public at Tzs. 850 per share. The Electronic Postal and Communications Act, as amended by the Finance Act 2016, requires all telecommunications licensees in Tanzania to have an IPO and list 25% of their shares on the DSE. The terms agreed by the CMSA values the 25% stake at Tzs 476 Bn. Details of the IPO, including when and how eligible potential investors will be able to subscribe for Vodacom Tanzania’s shares, will be announced in due course.

Going forward, what remains to be seen is how well the IPO performs given that this must be one of the largest ever in Tanzania and I am sure retail investors will be in the millions. However, going by how Safaricom’s IPO performed in Kenya a number of years ago, this could be a mixed bag (initially) as it would probably be a long-term and safe investment not prone to major increases in valuation at the start. Indeed, there are many parallels between Vodacom Tanzania and Safaricom in which Vodafone is a common major shareholder.

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