Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

We think Africa Airtel could be worth up to 111 pence/share driven by a DCF valuation of single-digit revenue growth and steady margins, which offers 11-23% upside from the 80-100p pricing range for its upcoming listing.  On a comparable basis, the shares are valued at the low end of the trading range for African mobile companies and at a discount to the pre-IPO funding which provides some valuation support for the offering. This is a follow-on to our initial pre-IPO report <a href="https://www.smartkarma.com/insights/africa-airtel-ipo-prospectus-first-look-the-mobile-money-opportunity-in-nigeria-stands-out" target="_blank" data-smartkarma-citation="insights:30475" rel="noopener">Africa Airtel - IPO Prospectus First Look: The Mobile Money Opportunity in Nigeria Stands Out</a> ​

We think Africa Airtel could be worth up to 111 pence/share driven by a DCF valuation of single-digit revenue growth and steady margins, which offers 11-23% upside from the 80-100p pricing range for its upcoming listing.  On a comparable basis, the shares are valued at the low end of the trading range for African mobile companies and at a discount to the pre-IPO funding which provides some valuation support for the offering. This is a follow-on to our initial pre-IPO report Africa Airtel - IPO Prospectus First Look: The Mobile Money Opportunity in Nigeria Stands Out ​

Africa Airtel: We See Upside at Top of the Valuation Range

Equity Capital Markets

Airtel Africa PLC / Equity Capital Markets

Africa Airtel has filed to list on the London Stock Exchange in an initial public offering to raise $750mn (£595mn) with proceeds to be used to pay down debt. The pricing range implies a market capitalization of $3.8-4.6bn (£3.0-3.6bn). Africa Airtel is the second-largest mobile operator in sub-Sahara Africa and has operations in 14 countries. Its largest market is Nigeria, which generates almost 40% of revenue and half of consolidated free cash flow.Many of the typical emerging market themes are at play here with a scope for sustainable long-term growth driven by an expansion in mobile services offset by headwinds from uncertain economic growth, currency headwinds and capricious regulators.As with the other African companies, the potential value creation from mobile money services is intriguing, particularly in Nigeria which is only now seeing these services launch. This represents what could be a c. $900mn opportunity for Nigerian mobile operators. For investors, Airtel Africa's LSE listing could offer an easier way to play that than <a href="https://www.smartkarma.com/entities/mtn-group-ltd" target="_blank" data-smartkarma-citation="entities:24897:1">MTN Group Ltd (MTN SJ)</a> (diluted by its wide footprint) or MTN Nigeria (local listing).In this insight, we look at the market opportunity, review Africa Airtel, lay out what we know about the IPO details and discuss some the forecast and valuation assumptions. We also have included a list of questions for the management team when the roadshow kicks off.

Africa Airtel has filed to list on the London Stock Exchange in an initial public offering to raise $750mn (£595mn) with proceeds to be used to pay down debt. The pricing range implies a market capitalization of $3.8-4.6bn (£3.0-3.6bn). Africa Airtel is the second-largest mobile operator in sub-Sahara Africa and has operations in 14 countries. Its largest market is Nigeria, which generates almost 40% of revenue and half of consolidated free cash flow.Many of the typical emerging market themes are at play here with a scope for sustainable long-term growth driven by an expansion in mobile services offset by headwinds from uncertain economic growth, currency headwinds and capricious regulators.As with the other African companies, the potential value creation from mobile money services is intriguing, particularly in Nigeria which is only now seeing these services launch. This represents what could be a c. $900mn opportunity for Nigerian mobile operators. For investors, Airtel Africa's LSE listing could offer an easier way to play that than MTN Group Ltd (MTN SJ) (diluted by its wide footprint) or MTN Nigeria (local listing).In this insight, we look at the market opportunity, review Africa Airtel, lay out what we know about the IPO details and discuss some the forecast and valuation assumptions. We also have included a list of questions for the management team when the roadshow kicks off.

Africa Airtel - IPO Prospectus First Look: The Mobile Money Opportunity in Nigeria Stands Out

South Africa

Vodacom Group Limited operates a cellular telephone network in South Africa. The Company has mobile operations in Tanzania, Mozambique, Lesotho and the Democratic Republic of Congo.

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Vodacom Group (VOD SJ)

Africa Airtel: We See Upside at Top of the Valuation Range

We think Africa Airtel could be worth up to 111 pence/share driven by a DCF valuation of single-digit revenue growth and steady margins, which...

Kirk Boodry

Africa Airtel - IPO Prospectus First Look: The Mobile Money Opportunity in Nigeria Stands Out

Africa Airtel has filed to list on the London Stock Exchange in an initial public offering to raise $750mn (£595mn) with proceeds to be used to pay...

Kirk Boodry

Price Gauge

52-week Range

Market Cap (USDm)

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