Airtel Money is seeking to form partnerships with FinTech companies in the Middle East to grow its Africa business and is open to potential dual listing in the UAE, its chief executive has said.
The primary objective for the payments company, which last week announced its intention to float on the London Stock Exchange, is to “finish the listing process” in London, Ian Ferrao told The National in an interview on Monday. Reports say the listing could potentially be one of the biggest IPOs in the UK since 2021.
“You never know what the next phase of this business has, and if we were ever to do another tranche, potentially there's always opportunity for dual listing in the future,” he said.
A number of companies have previously regarded UAE markets as dual-listing destinations and Mr Ferrao said “it's a potentially good option”.
“It's just not something we have discussed in detail yet but I'll never rule it out.”
Tough decision
The company, the mobile money arm of Airtel Africa, had considered several exchanges in Europe before choosing London, where shares of its parent are also traded. However, not picking the UAE was “a tough decision”, considering its corporate headquarters are in Dubai.
While Airtel Money opted for London due to deep pools of capital for its planned IPO, it still considers the Emirates as the “hub for Africa, not just from a financial and capital perspective, but also from a logistics perspective”, Mr Ferrao said.
“I would say it's the gateway between Africa and the rest of the world, and we view the UAE as very strategic to the future of our operations.”
Indian billionaire Sunil Mittal's Bharti Enterprises currently owns 78 per cent in Airtel Money through the firm’s parent Airtel Africa. In 2021, TPG, Mastercard, the Qatar Investment Authority and Chimetech Holding acquired minority stakes in the company for $550 million.
Following the IPO, Airtel Africa is expected to remain a long-term strategic shareholder of the company, Airtel Money said in a statement last week. Mr Ferrao, however, declined to say what percentages the minority shareholders would continue to hold post-transaction.
Airtel Money will release the IPO prospectus early next month, with an indicative price range and the number of shares to be offered, while final pricing will be determined in mid-October, the company said.
Media reports, however, said Airtel Money is likely to raise $800 million, which would give it a market capitalisation of between $8 billion and $9 billion at listing, with an expected free float of at least 10 per cent.
The World Bank Group’s private sector arm, the International Finance Corporation, has agreed to become a cornerstone investor for the deal and has committed to buy $90 million of the shares on sale.
The company has already held meetings with a broad range of institutional investors, as well as sovereign wealth funds from the Middle East and Asia, and expects a very positive investor response to the share float.
Citigroup, Barclays, Bank of America, Goldman Sachs and JPMorgan are arranging the offering, a shot in the arm for London which has struggled to attract major listings in the past few years.
Growth agenda
Airtel Money is a digital financial services platform operating across 13 African markets and provides services through a mobile-led model to its 53 million monthly active users.
It operates branches and kiosks across the continent used for paying utility bills, arranging microloans and buying goods. It processed $213 billion in the twelve months to the end of June, according to the statement.
Mr Ferrao said the primary goal of the company is to “champion the African markets” first before looking at other markets or regions for growth.
“The real immediate focus is on growing on our existing footprint and the 13 countries that we have in Africa have a lot of opportunity in each of them,” he said.
Although expansion into markets in the Middle East is not on the short-term growth agenda, the company is not opposed to the idea of striking partnerships or making acquisitions of technology firms in the region to support its African growth.
“Our ecosystem is expanding at pace, so there is always opportunities for more partnerships, especially companies that may want to get on to the African continent or have technology or the ability to deploy in Africa,” he said.
The company is building its financial services on the lending, saving, insurance as well as the wealth tech sides and “in these four areas, we are reliant upon partners”, he added.
