The 5 million limit and the limit on the normal mobile money transactions of up to 7 million per day is one way of ensuring that the financial industry is not abused for money laundering and other crimes like financing of terrorism.
MTN says, the IPO has attracted at least 60,000 new investors who have opened a Securities Central Depository (SCD) account, which is more than double the number of accounts at the Uganda Securities Exchange, before the IPO.
Telecom company, MTN has made a last-minute ditch to attract as many applications for the company’s shares as possible, with the closure of the Initial Public Offer, IPO, coming to an end Monday, November 22nd, 2021.
Following the opening of the sale in the IPO last month, the company launched a series of activities in October including road shows around the country to popularize the shares and also get feedback from the market.
The company has temporarily opened up the daily cash transfer limit to allow current account holders to pay for shares worth up to 20 million shillings per day using the mobile money platform, up from the 5-million-shilling limit announced at the IPO.
Management says this will not apply to those opening SCD accounts in the next three days because the move is based on the Know-Your-Customer policy. The 5 million limit and the limit on the normal mobile money transactions of up to 7 million per day is one way of ensuring that the financial industry is not abused for money laundering and other crimes like financing of terrorism. By keeping the 20 million shilling-window to existing account holders, the regulator and MTN felt it was less risky than opening the limit for new subscribers too.
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Public sentiments like the profitability of the company, its commitment that it will remain in the country for the long term as well as the fear that MTN Mobile Money Uganda Ltd, might not be part of the stock being offered, dominated feedback.
The people were also not well-informed about the stock market and the MTN blamed in on the long time it takes the Ugandan market to get a new product. MTN’s is the second IPO in 9 years, the other being Cipla Quality Chemicals Ltd in 2018.
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Currently, according to Vanhelleputte, the IPO has attracted at least 60,000 new investors who have opened a Securities Central Depository (SCD) account, which is more than double the number of accounts at the Uganda Securities Exchange, before the IPO.
This has given the company hope that they will get the required number of investors to buy the 20% shares, according to Vanhelleputte.
He however insists that the owners of the company, MTN International and Ugandan businessman Charles Mbiire never intended to raise new capital, but were responding to a regulatory requirement in order to keep their operational license.
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At the completion of the share sale, MTN international will remain with 76% shares in MTN Uganda, and Mbiire will have 4% while the other 20% will be held by the expected thousands of new shareholders, local and international.
This also is in response to a view within the Ugandan public that MTN could planning to exit the Ugandan market, following in the footsteps of company like Africel and Smart Telecom which recently announced their exits.
The CEO reasoned that the majority owner, MTN International cannot abandon the market, but that they are instead planning an expansion and network improvement investment of 1 trillion shillings in three years.
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After the close of the IPO on Monday the company will embark on the allocation of the shares to those who have subscribed and the allocation will be confirmed on December 3, while the listing on the Uganda Securities Exchange will be done on December 6.