Safaricom will announce the results of the Initial Public Offer share allocation today.
But analysts are pessimistic about the projected reap by investors.
According to the revised Safaricom prospectus dated March 28, applicants must brace themselves for few shares if the offer is oversubscribed.
So far, preliminary results show that the offer has been oversubscribed by 382 per cent. This means that some investors will be refunded their money.
An oversubscription arises when a company that has decided to list on the stock exchange gets more money than anticipated from the buyers. Under the capital markets laws, the company is required to refund such money.
Njoroge Ng'anga, the general manager of Dyer & Blair which is authorized to buy and sell shares on behalf of Safaricom, says the investors will get 25 percent of their initial investment, due to oversubscription. He says the allocations will be regionally balanced.
//Cue in: iIn this particular IPO#
Cue out: #it's a fair way of doing it.i//
In March this Year, The Kenyan government offered 25 percent of the country's leading telecommunications service provider-Safaricom to raise 50 billion Kenyan shillings following the election crisis that paralyzed the economy.
The Initial Public Offer kicked off on March 28 and closed on April 23, and is set to list at the Nairobi Stock Exchange on June 9.
On the 4th of June, the Safaricom investors will be enrolled on the Central Depository System- (CDS) of Kenya which is managed by the share blocker.
Under the CDS system, transactions are done electronically and there is no need of a share certificate. The system will soon be introduced in Uganda.