Flutterwave, a leading fintech in Nigeria, is preparing for an IPO on the Nigerian Stock Exchange. Executives recently met with President Bola Tinubu to discuss the listing. There are concerns over market liquidity, but a potential dual listing may provide better valuations. Flutterwave’s IPO could enhance the NGX’s global reputation amidst ongoing economic reforms by the government.
The Nigerian fintech company Flutterwave, a leading payment service provider in Africa, is preparing for an initial public offering (IPO) on the Nigerian Stock Exchange (NGX), which raises hopes for revitalizing a market that has faced challenges. Details of the IPO remain undeclared, but Flutterwave executives recently spoke with Nigeria’s President Bola Tinubu to discuss the potential stock market move.
Flutterwave currently holds the title of Africa’s fourth unicorn after securing $170 million in a Series C funding round in March 2021. If Flutterwave moves forward with its IPO, it would greatly enhance the reputation of the Nigerian equity markets, which have been hindered by low liquidity and declining investor confidence, leading to several companies like Courteville Business Solution delisting.
A dual listing strategy could be beneficial for Flutterwave, potentially listing on both the NGX and an international exchange like NASDAQ. By doing this, the company could attract better valuations comparable to Nigerian companies like Seplat and Oando, which listed in multiple markets to optimize their market positions.
Despite recent growth, the NGX has encountered significant challenges such as the FTSE Russell downgrading Nigeria from a “frontier” to an “unclassified” market due to foreign exchange restrictions. This downgrade impacts Nigerian equities’ reputation, compelling index funds and ETFs related to the FTSE Russell to divest from these stocks.
However, Flutterwave’s anticipated IPO along with ongoing forex and economic reforms under President Tinubu is fostering optimism. Financial analyst Rume Ophi indicates that the IPO would enhance Nigeria’s global standing, stating, “Flutterwave’s potential listing would signal to the world that Nigeria does not lack the capacity to produce more unicorns.” Ophi emphasizes that the government’s efforts to improve the business environment may expedite growth in the economy and the equity market.
In summary, Flutterwave’s forthcoming IPO on the Nigerian Stock Exchange could significantly enhance the market’s visibility and credibility. This strategic move may not only attract investments but also display Nigeria’s potential to nurture innovative companies. While challenges persist, the optimism around Flutterwave’s listing could inspire a renewed interest in Nigerian equities.
Original Source: african.business
