Dangote Petroleum Refinery and Petrochemicals is targeting 10 million retail investors with its N2.15 trillion initial public offering (IPO), a scale the transaction advisers said would be about 20 times the current retail participation record in Nigeria’s capital market.
The disclosure was made yesterday in Lagos at the signing ceremony for the initial public offering by way of an offer for subscription of 4.1 billion ordinary shares of $0.000013 each at N525 per share.
With the minimum subscription fixed at N5,250 and applications processed electronically through multiple channels, the transaction is now poised to test the capacity of Nigeria’s capital market infrastructure to accommodate mass retail participation.
The offer opens on September 14 and closes on October 14, ahead of the planned November listing on the main board of the Nigerian Exchange (NGX).
At N525 per share, investors can subscribe to a minimum of 10 shares for N5,250, with subsequent subscriptions in multiples of 10 shares.
The transaction advisers said the offer had been deliberately structured to take the opportunity beyond institutional investors and make it possible for a much wider pool of Nigerians to participate.
Managing Director of Vetiva Capital Management Limited, Chuka Eseka, said the distribution structure was being driven electronically through banks, fintech platforms, stockbrokers and other financial intermediaries.
He said the arrangement would enable Nigerians to subscribe without being physically present, describing it as a new approach to distributing capital-market offers in the country.
“This will be the first offer in Nigeria that will be made by persons who truly have to subscribe digitally, utilising a wide array of platforms involving banks, fintechs, the regular and significant markets and other financial intermediaries,” Eseka said.
According to him, the structure was deliberately designed so that investors could participate from wherever they were, with as little as 10 shares.
The 10 million target represents a sharp departure from the present level of retail participation cited by the advisers. They put the current market record at 131,000 retail investors, meaning the Dangote offer is seeking to draw a shareholder base many times larger than previous transactions.
The signing ceremony also marked the completion of a major stage in the transaction ahead of the opening of the offer. Eseka said the event went beyond the signing of documents, describing it as a commitment by the board, management and transaction parties to accountability, disclosure and transparency.
“The significance of this event is the commitment of the board, management, and all the transactional parties to the core goals of accountability, disclosure, and transparency,” he said.
President of Dangote Refinery, Aliko Dangote, said the broad investor target was the main reason for limiting the size of the offer, insisting that raising money was not the primary objective.
“So, it’s not really about raising money. If we want to raise money, we know how to raise and that’s why we have a limit. If not, we would have actually offered 20 per cent of the company,” he said.
He stressed that the IPO was designed to widen ownership of the refinery beyond institutional and wealthy investors and bring ordinary Nigerians, workers, drivers, managers and other small business owners into the ownership structure of the refinery.
“We are targeting ten million shareholders from all over Africa and maybe other parts of the world,” Dangote said.
Dangote added that the objective was to allow ordinary investors to build long-term wealth by owning shares in large African businesses. The offer also contains a retail investor incentive scheme under which qualifying investors may receive up to two additional shares, subject to meeting the prescribed holding period.
Dangote, however, said the IPO was not being driven by current geopolitical disruptions or elevated refining margins.
He said the company’s calculations were based on normal market conditions rather than the Russia-Ukraine war or the Middle East crisis, arguing that such disruptions could not form the basis for a long-term investment proposition.
Managing Director, Vetiva Advisory Services Limited, Olutade Olaegbe, said the transaction was a fixed-price offer, noting that investors would subscribe at N525 per share, while retail participation would be strictly electronic, with the offer available through participating bank applications, specified fintech platforms and stockbrokers.
Qualified institutional investors would also be able to subscribe electronically or through the application process provided in the offer documents.
He mentioned that there was also an oversubscription provision under which the issuer may accept up to an additional 30 per cent of the offer size, depending on demand and subject to the terms of the offer.
The proposed N2.15 trillion offer is primarily intended to support the refinery’s capital expenditure programme, even as the company says its expansion plan is already fully funded.
Dangote Refinery Chief Executive Officer, David Bird, said the plan to increase refining capacity from 700,000 barrels per day to 1.4 million barrels per day was fully funded, engineered and procured, with completion targeted for 2028.
He said the company’s expansion plans also include increasing its product range and building distribution infrastructure into other West African markets, describing the refinery as a merchant operation capable of processing different crude grades and supplying different markets.
“This is not just a refinery and petrochemical complex. This is truly a pan-African energy platform,” he said.
It was also disclosed that the refinery had previously sought $1 billion from private investors and received demand of $3.7 billion, as the company eventually accepted $2.5 billion and returned $1.2 billion.
He said the experience reinforced the level of interest in the refinery but stressed that the public offer was intended to widen ownership.
Chief Executive at Stanbic IBTC Capital Limit, Sotubo Oladele, said the next test would be whether the market could deliver the targeted investor numbers once the offer opened.
It was also revealed that the transaction had received Sharia-compliance certification following an independent assessment of the refinery’s activities and products against applicable Islamic finance standards.
The advisers said the certification would make the offer accessible to investors seeking Sharia-compliant investments.
