#MuherezaWrites,
OPINION
On Monday 11th October 2021, excitement hit the business fraternity especially young zealous aspiring investors when MTN announced its IPO (Initial Public Offering). The company saw it as a reward to a loyal customer base that had supported the telecom since its inception in Uganda on October 21st 1998.
MTN became the first telecom to announce an IPO which is a milestone to be celebrated in the telecommunication business considering the dynamics of the business in the country. Airtel Uganda has so far as well announced its IPO which started on 30th August 2023 and will run Upto 13 October 2023.
As a Ugandan aspiring investor, it would be prudent for you to understand these IPOs to use your leverage to have stakes in these booming businesses. Let’s break down a few basics to know about an IPO.
Initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance for the first time. An IPO allows a company to raise equity capital from public investors while allowing the public to become shareholders and own part of the company.
Overall, the number of shares the company sells and the price for which shares are sold are the generating factors for the company’s new shareholders’ equity value. Shareholders’ equity still represents shares owned by investors when it is both private and public, but with an IPO, the shareholders’ equity increases significantly with cash from the primary issuance.
The most significant benefit of IPOs is the public’s opportunity to buy shares in a company. That can be attractive for many reasons. IPOs offer the chance to get a foot in the door of a profitable business that otherwise would be closed to you. So here is your chance to brag about being part of the Owners of Airtel and MTN.
