Letshego’s IPO excites analysts

01 September 2017
An analyst from Simonis Storm Securities say Letshego Holdings Namibia’s (LNH) planned listing on the Namibian Stock Exchange is expected to attract interest from institutional investors.
LNH will become the first primary listing on the NSX since Bank Windhoek in 2013.
“We think there will be a lot of interest in the share. We believe that the current share price indicate the levels institutional shareholders are willing to pay. The proposed adjustments of the pension fund Regulation 28 to increase local asset limit to 45 percent will play a greater role too,” Megameno Shetunyenga, an Analyst at Simonis Storm Securities said.
“Letshego Holdings Namibia is in a growth trajectory path.”
LNH is expected to list on the NSX on 28 September at an opening price of N$4.70, which is a 30 percent discount compared to its peers.
Letshego is selling 20 percent (100 million shares) of its shares in the company worth N$470 million. The company has set aside 5 million shares for Government employees and Letshego staff who will get preferential finance from the company to acquire the shares. 
The minimum number of shares one can purchase is 200. The public offer opened on 25 August and will close on 22 September.
“We think it’s a good step especially for the market. More counters in the market will slightly improve on liquidity,” Shetunyenga said.
Letshego serves over 55,000 customers, 50 percent of whom are government employees.
Chairman, John Shepherd, told the Windhoek Observer that it’s the board’s intention to sell the shares to a wide base as possible, especially previously disadvantaged Namibians.
IJG Securities was chosen as the sponsoring broker of the listing.
IJG Securities Managing Director, Lyndon Sauls, said there has been a positive response since the public offer opened. 
He said he is expecting between 10,000 and 12,000 people to buy shares.
“This will surpass the 6,000 figure that was achieved by Bank Windhoek.”
The IPO, at N$470 million, is bigger than Bank Windhoek’s IPO, which was worth N$320 million.
Local empowerment company, Kumwe Investments, already owns 15 percent of the company which will be diluted to 12 percent after the listing.
With 20 percent being offered to Namibians as part of the listing, the company will still fall short of the Bank of Namibia requirement that 45 percent of financial institutions be in local hands. 
The central bank has given Letshego a deadline of 2020 to meet that requirement.
“It’s premature to say at this point how that will be achieved; we may sell shares or arrange other empowerment deals,” Shepherd said. “The board is yet to apply its mind on that.”
Shepherd added that the company’s growth prospects are not solely dependent on its micro lending business, as its banking business is set to be expanded.
“We plan to transition as many customers from our micro lending business into our banking services.”
The company was given a banking licence in July 2016.
Letshego is scheduled to launch its retail inclusive finance solutions including savings, payments and lending before the end of this year.
Chief Executive Officer, Ester Kali, said Letshego has already scheduled a soft launch for its banking services by testing it with a few of its clients.


The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

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