Airtel Uganda, a subsidiary of India’s Bharti Airtel, announced plans on Wednesday to sell the remaining shares from its initial public offering (IPO) that were not subscribed. This decision is a strategic effort to align with Uganda’s broadband policy, which requires telecom companies to list at least 20% of their equity on the local stock exchange.
The announcement follows Airtel Uganda’s IPO last year, which saw only 54.45% of the 8 billion shares being purchased, aiming to raise 800 billion Ugandan shillings (approximately $216.22 million). Despite the undersubscription, the move was part of the company’s commitment to adhere to national regulations within a stipulated two-year timeframe, aiming for full compliance by November 2026.
David Birungi, spokesperson for Airtel Uganda, emphasized the company’s dedication to fulfilling its regulatory obligations. “Our duty is to comply with national regulations, and we’ll comply within the timeframe of two years,” Birungi stated in a phone interview. He further noted that the strategy to sell the leftover shares is targeted to achieve compliance and enhance the company’s financial strength in the competitive market.
Airtel Uganda is currently the second-largest telecom operator in the country, trailing behind MTN Uganda, which is part of South Africa’s MTN Group. Notably, MTN Uganda also faced a similar situation where it had leftover shares from its own IPO in 2021. Last month, MTN Uganda undertook a secondary market sale to distribute these shares, indicating a common trend among telecom operators in the region to meet market and regulatory expectations through public offerings.
The requirement to list a significant portion of equity on the local stock exchange is part of Uganda’s broader initiative to ensure that major telecom firms maintain a substantial local stake in their operations. This policy aims to foster greater local investment, ensure transparency, and build public trust in these companies that are pivotal to the national economy.
The move by Airtel Uganda to sell these shares not only highlights the company’s proactive approach to compliance but also reflects a growing trend among telecom companies in emerging markets. These firms are increasingly looking to deepen their roots in local markets by engaging more with local investors and complying with national regulations that are designed to boost economic development and technological advancement.
