The Dangote Refinery IPO offers the general public a roughly 3% stake in the refinery. Dangote, Africa’s richest man, has described the offering as a “people’s IPO,” saying the move was intended to give ordinary Nigerians an opportunity to participate in the plant’s success.
However, the refinery’s private placement in July required institutional investors to pay a lower valuation than retail investors.
Back then, the placement raised USD 2.5 billion for a 6% stake, valuing the refinery at around USD 40 billion.
If everything goes as per Dangote’s plans, the refinery’s IPO may end up valuing the company closer to USD 49 billion.
Stating that the IPO opened with a low investment threshold, CEO David Bird told Reuters that the discount offered to institutional investors reflected conditions attached to the private placement, including a lock-up period.
If fully subscribed, the IPO on Nigeria’s main stock exchange may raise 2.15 trillion naira, or about USD 1.6 billion.
The amount could rise to roughly USD 2.1 billion if the offering gets oversubscribed and the company exercises a greenshoe option to issue additional shares.
Dangote Refinery has designed its IPO to attract retail investors through a relatively low entry threshold. These investors can purchase as few as 10 shares through fintech and other digital investment platforms, requiring a minimum investment of about USD 4.
That compares with the approximately USD 8 minimum investment for retail investors in telecoms company MTN Nigeria’s 2021 share offering, based on the exchange rate at the time.
As per the investment app Bamboo, interest in the Dangote IPO has already been evident among Nigerian retail investors.
The app saw traffic to its platform growing significantly higher than usual immediately after the IPO’s launch.
Institutional investors too have kept their eyes on the IPO’s direction. UAE state oil giant ADNOC had previously expressed interest in investing in the plant, going by Dangote’s statement in the lead-up to the market listing.
The refinery came into the limelight this year by capitalising on the increased demand for its products, especially jet fuel, following Iran war-related supply disruptions.
By June, Dangote Refinery emerged as a major global and regional supplier of jet fuel (Jet A-1), operating at a high capacity of 650,000 to 700,000 barrels per day. It was a massive achievement for the refinery since it began operations in 2024.
The facility currently processes 700,000 barrels of crude oil per day and aims to increase capacity to 1.4 million barrels per day by 2029.
The IPO also forms part of Dangote’s broader plan to bring his business empire to public markets, with the African tycoon having the long-term goal of listing every company in his conglomerate, with operations spanning cement, sugar, and salt.
Dangote Refinery will be eyeing a secondary US listing within three to four years.