President and Founder of the Dangote Group, Alhaji Aliko Dangote, has reaffirmed his commitment to ensuring that Nigerians and other Africans participate in the ownership and benefits of the Dangote Refinery through its planned Initial Public Offering (IPO).
Dangote spoke on Thursday in Abuja at the launch of the Abuja leg of the refinery’s investor roadshow, tagged “The Eagle Has Landed,” which attracted investors, financial analysts, economists and representatives of shareholders from across the country.
Re-echoing the group’s 2030 vision of “accelerating Africa’s industrialisation,” Dangote said the group was expanding its investments beyond Nigeria into countries including Ethiopia, Kenya, Tanzania and Namibia.
“Our hope is that other African entrepreneurs would join us in this journey of industrialising our continent,” he said.
In a goodwill message delivered on his behalf by the Group’s Regional Director and Senior Adviser to the Group President, Hajiya Fatima Wali Abdurrahman, Dangote said the planned IPO would raise N2.15 trillion ($1.6 billion) at an offer price of N525 per share, with a minimum subscription of 10 shares.
He said the proceeds would be used to fund the refinery’s expansion programme, while the relatively low minimum subscription was designed to promote broad-based ownership.
“In the approaching Dangote Refinery IPO, we intend to raise N2.15 trillion ($1.6 billion) – at an offer price of N525, with a minimum subscription of 10 shares – to fund the expansion programme of the refinery.
“The offer price and minimum subscription level are to allow for wider participation as we want every Nigerian to own a piece of this asset. That is why we have called it the IPO for the People.
“We want every human being living on the African continent to be part of the action and reap the resultant benefits,” he said.
President of the Association for the Advancement of Rights of Nigerian Shareholders, Dr Faruk Umar, said the planned listing had generated significant excitement among retail investors.
Umar, who spoke during a panel session, said more than 500,000 members of the association had approached stockbrokers to participate in the offer.
“Since the discussion on the listing of Dangote IPO commenced, we have gotten an encouraging response. We have gotten over 500,000 people who have opened accounts with stockbrokers to buy Dangote shares,” he said.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, described the IPO as a major development for Nigeria’s economy, particularly given the country’s long-standing dependence on imported petroleum products.
“The significance of this massive IPO cannot be overemphasised. One reason the Nigerian economy is vulnerable is its dependence on imports. Over $15 billion is spent annually on importing fuel. This is what the Dangote Refinery is halting.
“We need the right policy environment to make it happen. Our policies should support our trade,” Yusuf said.
He added that grassroots investors stood to be among the major beneficiaries of the IPO.
Lead speaker and Managing Director/Chief Executive Officer of Financial Derivatives Company Limited, Mr Bismarck Rewane, said the Dangote Refinery had no comparable competitor in Africa, stressing that its impact extended beyond Nigeria.
“What does the Dangote Refinery mean? It represents a bigger market for Nigeria and Africa. The IPO no doubt will deepen participation and improve investors’ confidence,” Rewane said.
Professor of Capital Market and President of the Capital Market Academics of Nigeria, Prof Uche Uwaleke, urged investors to approach the offer with a long-term investment perspective rather than as a speculative opportunity.
“This is not an investment you speculate, but one to buy with a long-term view,” he said.
Uwaleke said the transaction combined an investment opportunity with capital-market development and wider economic transformation.
He identified potential capital appreciation, dividend income, exposure to the energy and petrochemical industries, and ownership of a major industrial asset as some of the attractions for investors.
According to him, the refinery has multiple potential revenue streams spanning refining, petrochemicals, storage, marine logistics, pipeline infrastructure and power.
He added that export activities could provide another revenue source as the company expands across African markets and accesses demand outside Nigeria.
Uwaleke said the low minimum subscription could bring a large number of retail investors into the capital market, noting that the company’s retail-investor ambition was about 10 million investors.
He said achieving the target could significantly increase the number of Nigerians directly holding shares in a major industrial company and help foster a stronger culture of equity ownership, long-term savings and investment.
“This is about moving Nigerians from being consumers to co-owners of strategic infrastructure,” he said.
He added that a successful listing could substantially increase the market capitalisation of the Nigerian Exchange, attract more retail and institutional investors, broaden sectoral representation and create a major new investment option for pension funds and asset managers.
Refinery could boost dollar earnings
Founder and Chief Executive Officer of Nairametrics, Mr Ugodre Obi-Chukwu, said investors generally seek companies capable of growing profits, paying dividends and sustaining demand for their shares.
He highlighted the refinery’s potential dollar-linked earnings, arguing that its ability to generate dollar-denominated income and profits could make it attractive to investors seeking protection against exchange-rate risks.
Obi-Chukwu compared the refinery’s valuation with that of Seplat, saying Seplat was trading at about 20 to 21 times earnings, while Dangote Refinery was trading at about 12 times earnings based on his assessment.
He said if the refinery eventually attracted a similar earnings multiple to Seplat, its share price could theoretically rise to about N1,000.
However, he stressed that such a comparison represented an analyst’s valuation scenario and should not be interpreted as a guaranteed share-price target.
Obi-Chukwu also linked the refinery’s expansion to Nigeria’s ambition of building a $1 trillion economy, arguing that oil refining could become one of the country’s top economic subsectors as the Dangote Refinery operates at scale.
He said Nigeria needed more large companies on the stock exchange because capital formation was essential to expanding production across the economy.
According to him, Nigeria has about 160 listed companies, with roughly 10 companies accounting for about 80 per cent of the exchange’s market capitalisation.
He said increasing the number of strong Nigerian companies listed on the exchange would enhance capital mobilisation, improve measurement of the corporate economy and support long-term economic growth.
Obi-Chukwu further linked the refinery to Nigeria’s efforts to reduce imports and increase exports, saying the path to a $1 trillion economy required greater domestic production, stronger manufacturing and increased exports.
He said the refinery could contribute by increasing domestic production of petroleum products and creating demand for additional manufacturing and industrial services.
IPO, industrialisation and economic transformation
Chief Consultant at B. Adedipe Associates Limited, Mr Biodun Adedipe, said the IPO would have a positive impact on the macroeconomy.
According to him, Nigeria had suffered from energy insecurity arising from external shocks before the commencement of operations by the Dangote Refinery.
“The Dangote Refinery is quite significant to the Nigerian economy. Its market is not essentially restricted to Africa; its products are globally consumed,” Adedipe said.
The Dangote Refinery IPO therefore brings together three major developments: wider public ownership of a strategic industrial asset, deepening of Nigeria’s capital market and expansion of a Nigerian industrial enterprise across Africa.
Its ultimate significance, analysts said, would be measured not only by the amount raised but also by the number of Nigerians who become shareholders, how effectively the funds are deployed to expand the refinery and whether the company delivers sustained earnings and returns to its new owners.
