Flutterwave, a leading Nigerian fintech unicorn, is preparing for an IPO on the Nigerian Stock Exchange, which may positively impact the local equity market. The company has met with government officials to discuss the listing, aiming to address the challenges highlighted by a recent market downgrade by FTSE Russell. A successful IPO might enhance Nigeria’s reputation and encourage more firms to explore the NGX for future listings.
The Nigerian fintech giant Flutterwave is reportedly gearing up for an initial public offering (IPO) on the Nigerian Stock Exchange (NGX), potentially revitalizing an equity market that has faced inconsistent growth in recent years. While detailed plans for the listing have not yet been revealed, Flutterwave executives recently conferred with Nigerian President Bola Tinubu to discuss the possibility of joining the stock market. Should Flutterwave, Africa’s fourth unicorn valued over $1 billion after securing $170 million in a funding round, successfully list, it would be a significant achievement for the NGX.
Nigerian stock markets and other African exchanges have encountered challenges in attracting substantial listings, primarily due to limited liquidity which can affect price stability. Companies like Courteville Business Solution have delisted recently due to concerns that low liquidity resulted in share prices that do not accurately reflect true market values. Flutterwave may consider dual listing on both the NGX and an international stock market such as NASDAQ to avoid these issues and achieve better market valuation.
The NGX has shown resilience, with its All Share Index more than doubling since early 2023, despite facing obstacles. However, in September 2023, the prominent benchmark provider FTSE Russell downgraded Nigeria’s market from “frontier” to “unclassified.” This decision stemmed from long-standing foreign exchange challenges that hindered foreign investors from repatriating profits due to capital controls and a scarcity of US dollars.
The potential IPO of Flutterwave, combined with President Tinubu’s economic reforms, has fueled optimism regarding the NGX’s prospects. Financial markets analyst Rume Ophi opines this listing could enhance Nigeria’s standing on the global stage. “Flutterwave’s potential listing would signal to the world that Nigeria does not lack the capacity to produce more unicorns. We have some of the smartest young people on earth and one of the most youthful populations in the world,” he states. Ophi emphasizes that the government is actively working to improve the overall business environment, which should hasten growth and attract more companies to Nigeria.
In conclusion, Flutterwave’s anticipated IPO represents a pivotal moment for the Nigerian Stock Exchange, which has struggled with liquidity issues and international reputation. Executives from Flutterwave have engaged with government officials to explore this listing, which could bolster confidence in the local market. Analysts believe that such a move would not only enhance Nigeria’s global image but also encourage other companies to consider the Nigerian market for future listings.
Original Source: african.business
