Analysts Predict Retail Surge As NGX Prepares For Africa’s Biggest IPO

Optimism is building across the Nigerian capital market ahead of the Dangote Petroleum Refinery Initial Public Offer (IPO), as analysts projected a massive influx of retail and foreign investors into what is expected to be Africa’s biggest public offer.
Market operators said the IPO will fundamentally reshape the NGX by breaking its reliance on banking, telecoms and cement, and creating a new anchor stock in the refining sector.
With the offer sized at 4.1 billion units and an indicative price of N525, analysts estimated the IPO alone could add 30 per cent to 40 per cent to the Exchange’s N160 trillion market capitalization.
They also expect daily turnover to jump from the current N30 billion to N50 billion range to over N100 billion.
The chief operating officer of InvestData Consulting Limited, Ambrose Omordion, said the market is ready for the scale of the IPO.
He stated that, “this one company alone will represent between 30 per cent to 40 per cent of the market capitalization. Bringing in a company of that size increases the depth of our market and gives investors more choice. Before now, we relied on cement, telecoms and banking. Now we are moving into an entirely new sector, oil refining. So it widens the scope.”
Omordion added that brokers should expect a surge in new accounts, saying “for brokers, it is a welcome development because we can get a minimum of one million additional investors.
“On average we do between N30 billion to N50 billion daily. With this IPO, I see us hitting N100 billion turnover per day. Instead of millions of dollars, we will start hitting one billion dollars in turnover in a day.”
The managing director of Globalview Capital Limited, Mr. Aruna Kebira, said the size of the IPO will dwarf existing stocks and test market infrastructure.
“If 4.1 billion units of Dangote Refinery at N525 hit the market through this IPO, it is going to dwarf the market. Because of the size of the offer, it is also a test for the Securities and Exchange Commission and the NGX on post-IPO requirements and corporate governance.”
Kebira also recalled the impact of previous Dangote offers, saying “What I am looking at is what happened in 2004, when the Dangote offer brought a lot of people to the market. Even now, people are selling their stocks and keeping money to buy Dangote. Those who are not yet investors are coming to the market because of Dangote.”
The chief executive officer of APT Securities & Funds Limited, Mallam Kurfi Garuba, said the timing is right given recent reforms and Nigeria’s frontier market status.
Garuba noted that the IPO would position Nigeria as a capital-raising hub for West Africa, saying “if they see that Nigeria can stand as a hub, it is like how the London market stands for Africa and Europe. This will give Nigeria that same position.”
Analysts said that with CSCS, brokers and registrars already scaling up capacity, the Dangote Refinery IPO could mark a turning point for retail participation and foreign inflows into the Nigerian market.
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