It’s A Good Buy: Businessman Sudhir Ruparelia Endorses Airtel IPO

By Gad Masereka

A prominent businessman s Dr. Sudir Ruparelia has praised the Airtel Uganda IPO, calling it an excellent investment and the largest individual and Ugandan shareholder on the Uganda Stock Exchange.

Speaking to the CEO of East Africa Magazine after Airtel Uganda unveiled its IPO prospectus, Dr. Sudhir said that the telco’s historically strong performance and the expanding significance of communication technologies make the Airtel IPO a worthy investment.

“What I’ve seen here, for instance, in the prospectus, forecasts earnings per share of UGX22 per share this year—for a price of UGX100 at IPO, it is a really good prospect,” the reader writes. I would most certainly be putting money into this, he assured the reporter.

“I’m just going to study and see how much am going to invest,” he declared.

Telecom has offered 8 billion shares, or 20% of the 40 billion shares that have been issued, for UGX100 each. The IPO will end on October 13, 2023, at 4:00 p.m. The allocation results will be made public on October 30, 2023, at 4:00 p.m. Following that, on October 31, 2023, the business will list all 40 billion issued shares on the Main Investment Market Segment of the Uganda Securities Exchange (USE).

The businessman was the seventh-largest stakeholder and the largest individual holder of Stanbic Uganda Holdings Ltd. as of the end of December, holding 330,723,247 shares, or 0.65% of the company. With 2.5% (62,527,250 shares), he is also the second-largest shareholder in Bank of Baroda. He also owns 2,165,575 shares in dfcu Limited, which is equivalent to 0.3%. He also has stock in Umeme Limited and NIC Holdings Limited.

Today, telecommunications is a necessity rather than just a nice-to-have. Like food, housing, and clothing, communication has evolved into a basic requirement. The Internet has turned into a requirement. For the majority of economically engaged people and businesses, it is essential. This justifies looking into telecom investment,” he said.

Additionally, he claimed that once Uganda’s economy recovered from the COVID-19 shock, profits on stock investments on the market were also expected to rise.

“The economy of Uganda is expanding and recovering. Although there may occasionally be a liquidity shortage in some industries, telecom companies are unquestionably growing and developing. The majority of the listed companies’ profits have performed well. With the exception of a few stocks, returns on the stock market are generally doing well, but overall, very strong dividends are being paid out, he continued.

In addition to having 518 million users worldwide and a USD64.3 billion market cap, Airtel has been profitable for the past five years and beyond. The corporation made a net profit of UGX268 billion, UGX216 billion, UGX277 billion, UGX393 billion, and UGX326 billion for 2018, 2019, 2020, 2021, and 2022, respectively, according to financials that have been publicly disclosed.

This contrasted with respective gross receipts of UGX1 trillion, 1.087 trillion, 1.294 trillion, 1.505 trillion, and 1.594 trillion.

The telco has been operating in Uganda since 1995 and currently holds the second-largest market share for subscribers and revenue, at close to 49% and 47.3%, respectively. The company’s managing director, Manoji Murali, claims that Airtel Uganda has 13.8 million active subscribers spread throughout 146 districts in Uganda.