Dangote may seek SEC nod for extra shares as IPO demand surges

• Bamboo, Cowrywise, Afrinvest cave in to unprecedented traffic
• Thousands subscribe within minutes as banks, fintechs race to cope with demand
• Dangote targets $350b market value by 2030, plans to list affiliates
• Refinery, a proof Africans can build, own global assets, says Mooki

Nigeria’s capital market was thrown into an unusual frenzy yesterday, as thousands of investors scrambled to buy into the Dangote Petroleum Refinery and Petrochemicals initial public offering (IPO).

An hour into the transaction, as much as N1.48 trillion was pooled from 402,634 deals, according to a tweet by the Nigerian Exchange Group (NGX) that was later deleted, highlighting the scale of interest in the asset.

The market rule allows an issuer to take 25 per cent above the offer size. Additional absorption requires the approval of the Securities and Exchange Commission (SEC) as per market rules.

The private placement where the company sought to raise $1 billion was oversubscribed by $2.7 billion or 270 per cent. The company absorbed $1.5 billion above the offer size and refunded $1.2 billion.

Market operators projected the IPO could be oversubscribed by multiple times before the window closes, suggesting many investors may have their money refunded.

But the Chief Executive Officer of High Cap Securities, David Adonri, who doubted the promoter, Aliko Dangote, would be willing to give more equities, said the asset was worth the gambit.

The total issued shares of the refinery are 120.13 billion. Dangote and his companies hold 80.74 per cent while Greenview International Corporation holds 6.5 per cent. Nigerian National Petroleum Company Limited holds 6.8 per cent.

Dangote is offering 4.1 billion shares, or 3.4 per cent of the total company shareholding, for public subscription.

“Live update on the number of transactions so far since the opening of the #dangoteIPO from the #NGXInvest command centre. The numbers are really ticking… truly the IPO OF THE PEOPLE,” NGX tweeted in a live update after the opening of the IPO.

The frenzy overwhelmed some digital investment platforms, exposing the infrastructure challenges behind apps powering the country’s rapidly-expanding retail investment culture. Minutes into the N2.1525 trillion offer opening, subscriptions had already crossed N10 billion, while frantic attempts by investors to secure shares triggered heavy traffic on fintech platforms, with some users unable to log in or complete transactions.

For the better part of yesterday, Bamboo, Cowrywise and Afrinvestor were technically shut down as investors rushed to take a slice of the country’s biggest public offer and an audacious attempt to bring a major African industrial asset into mass public ownership.

The extraordinary response demonstrated the appetite among Nigerians to own a stake in the refinery. It also exposed the limits of the digital infrastructure increasingly being used to bring millions of retail investors into the capital market.

The Nigerian Exchange Group (NGX) is counting on digital platforms to lead the ambition of onboarding a new generation of investors, with Bamboo and Afriinvestor taking the lead. For instance, NGX data said Bamboo controlled 22 per cent of the volume of trade executed in the market in the first seven months of the year.

The offer, which opened at about 8 a.m., quickly became a major event across investment platforms, with investors reporting “failed logins”, “login expired” and difficulties executing transactions.

Bamboo acknowledged that it was receiving much higher-than-expected traffic from investors trying to access the Dangote offer, making it difficult for some users to log into the application.

Cowrywise also reported unusually high traffic, saying its team was working to restore normal access. The platform later said the disruption lasted about an hour before full service was restored. Afrinvestor equally faced difficulties, with users reporting problems accessing the platform and completing transactions.

The disruptions triggered complaints across social media, with some investors questioning whether the platforms had adequately prepared for the demand after weeks of promoting the IPO to their customers. Yet, even as some digital platforms struggled under the pressure, the rush underscored the unprecedented retail appeal of the transaction.

Chairman of Nigerian Exchange Group, Umaru Kwairanga, disclosed that subscriptions had already exceeded N10 billion a few minutes into the transaction. He predicted that the transaction could ultimately produce a shareholder base so large that the company might require a stadium to accommodate investors at its annual general meetings.

“We would eventually have a company of the highest number of shareholders in the world and we would be looking for a stadium for our yearly general meeting,” he said.

Chairman of Coronation Group, Aigboje Aig-Imoukhuede, also described the opening response as extraordinary, saying billions of naira had been subscribed by thousands of investors within minutes or less than an hour of the offer opening.

The scale of the response has fuelled reports that as much as N1.5 trillion was subscribed within six hours of the opening. However, the figure has not been independently confirmed by the NGX or the issuing houses.

What has been corroborated is that subscriptions had crossed N10 billion, with thousands of investors participating almost immediately after the offer opened. The rush was not restricted to fintech platforms. Banks activated their digital and physical channels as investors sought alternative routes to beat the pressure on some investment applications.

Zenith Bank opened its website, mobile application, internet banking, USSD, corporate banking channels and branches nationwide for subscriptions. FirstBank activated FirstMobile, FirstOnline, LIT App, PayByLink, FirstDirect, FirstMonie agents and its branches, while Fidelity Bank allowed customers to subscribe through its mobile application and provided dedicated virtual accounts for non-customers.

Moniepoint also opened the offer to customers through its banking application. The intensity of the response was amplified by the exceptionally low entry threshold.

At N525 per share, investors need only N5,250 to buy the minimum 10 shares, making it possible for a broad population of Nigerians to participate. The offer is targeting as many as 10 million investors, an ambition that could dramatically expand the shareholder base of one of Nigeria’s biggest industrial businesses.

Group Managing Director/Chief Executive Officer of Vetiva Capital Management, the lead issuing house and lead adviser, Chuka Eseka, said the transaction was Nigeria’s first public offer deliberately structured to enable retail investors to subscribe entirely through digital channels.

He said investors could subscribe through bank applications, fintech platforms and POS terminals. The structure, he added, was designed to reach Nigerians wherever they were. The frenzy has consequently become as much a test of Nigeria’s digital investment infrastructure as it is of the appetite for Dangote shares.

For years, retail participation has remained one of the weaknesses of Nigeria’s equities market. The Dangote offer has suddenly created a mass-market event that can draw ordinary Nigerians into direct equity ownership.

But Monday’s experience also revealed the risks of a rapid migration to digital investing without equivalent investment in technology capacity. Fintech platforms that had spent weeks attracting customers to the offer suddenly found themselves facing traffic on a scale that some struggled to absorb.

Fintech commentator May Codegidi contrasted the disruptions with traditional banking channels, which she said processed subscriptions without similar difficulties.

Amid the retail frenzy, President of Dangote Industries Limited, Aliko Dangote, said the wider objective was to transform the group into a $350 billion company by 2030.

Speaking at the Facts-Behind-the-Offer Presentation and Market-Opening Gong Ceremony in Lagos, Dangote said the group would use the Nigerian Exchange as its base before taking its businesses to international markets.

He said the group intended to list all the companies it operates on the NGX. According to him, the group’s market capitalisation should reach at least $350 billion by 2030, based on a price-to-earnings ratio of 10 times.

Dangote said the N2.1525 trillion refinery IPO was not primarily about raising money because the group already had sufficient capital for its immediate expansion plans.

Rather, he said, the offer was designed to spread ownership and allow millions of Nigerians, Africans and global investors to participate in the wealth created by the business. The offer comprises 4.1 billion ordinary shares at N525 each and would raise N2.1525 trillion if fully subscribed.

Dangote said the decision to broaden ownership followed the extraordinary demand recorded during an earlier private placement.

The company had initially planned to sell $1 billion worth of shares to private investors but received applications worth $3.7 billion. It eventually accepted $2.5 billion and returned $1.2 billion to investors because it could not accommodate the entire demand.

Dangote said the experience demonstrated the strong appetite for ownership of the refinery and encouraged the company to open the investment to the wider public.

He disclosed that the group had about $46 billion worth of investments in its pipeline through 2030, covering refining, cement and fertiliser.

The refinery, currently operating at about 700,000 barrels per day, is being expanded to 1.4 million barrels per day, while the group plans to build another 700,000-barrels-per-day refinery in Kenya. Its total refining capacity could therefore rise to 2.1 million barrels per day.

Dangote also said polypropylene production was expected to rise to 2.5 million tonnes, while the group was considering investments outside Africa, including in the United States, within the next three to four years.

He challenged African investors to take ownership of major businesses on the continent.

“Africa must own this share,” he said.

“I do not want to be called the richest man in Africa. I want to be called the wealthiest man in Africa so that I can create wealth for others.”

Chairman of the NGX Group, Kwairanga, said the transaction represented an important test of the capacity of Nigeria’s capital market to connect African savings with African enterprises.

Lagos State Governor, Babajide Sanwo-Olu, described the transaction as a historic moment for Nigeria and Africa, saying it demonstrated that African businesses could attract capital on a global scale.

Chairman of the Botswana Stock Exchange, Neo Mooki, also commended Dangote, describing the refinery as evidence that Africans could build and own globally significant assets.

“I always say that Africa is not poor,” Mooki said.

The public offer represents about 3.3 per cent of the refinery’s enlarged share capital and is structured as an offer for subscription, meaning that new shares are being issued by Dangote Refinery and the proceeds will accrue to the company.

The funds will form part of the financing for the planned expansion, estimated at $14.3 billion.

The offer closes on October 13, 2026. The final subscription level will only be known after applications are collated and reconciled by the registrars and issuing houses. (Guardian)