Kenya is gearing up for the country's largest ever IPO, scheduled for November, when the government plans to sell a 30% stake in Kenya Electricity Generating Company (KenGen).
The sale of the stake should raise about $120 million for the government. "This is a huge public offering for Kenya," says Andre de Simon, executive director of Kenyan investment house Kestrel Capital, which has been appointed co-sponsoring broker for institutional investors on the issue.
Kenya's previous largest IPO was an approximately $30 million-equivalent listing in 1996 of Kenya Airways. Following that listing, Dutch airline KLM took a 26% stake in the company.
The size of the offering makes it likely that international investors will play a significant role in the IPO, alongside domestic retail and institutional players. On the secondary market, foreign players generally account for about 10% of trading volume. "Kenya has quite a vibrant retail market, with some very large private investors," says de Simon.
Although a rush of IPOs is not expected, Kenyan investors are hoping that Safaricom – the mobile phone operator jointly owned by Telkom Kenya and Vodafone – will be brought to the market in the near future.