It is a great playbook which everyone has been asking for: yes, change the rules and let some of the new species of companies find their feet within the Nigerian stock exchange. And there seems to be a plan: “The Nigerian Exchange (NGX) hopes to rethink laws guiding Initial Public Offering (IPO) in order to make the terms attractive enough to woo tech start-ups with valuation topping $1 billion and other companies for listing on the Nigerian bourse.”
If we do not get these companies, the nation will lose. Imagine if the new generation banks which brought new ordinance in banking were not attracted to the Nigerian stock exchange in the 1990s, today we will not have GTBank*, Access Bank and others. So, anything the nation can do to get the likes of Flutterwave and Interswitch to list in Nigeria will be huge. Lol.
The #1 rule is this: profitability should not be used as a major metric because some of these firms may not be profitable for years. But they will be after their leverageable factors through scale begin to compound. So, we need to get them in as quickly as possible because what they do is what the future will be for.
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New listings seem hard for the NGX to find following slow growth in Nigeria on account of the pandemic outbreak, forcing investors to make do with fewer stocks and weakening liquidity.
Mr Bolumole said NGX would be banking on the review to win over technology firms desiring to source additional capital or provide liquidity for current stockholders.
A raft of tech start-ups focusing on Nigeria and Africa has advanced to become unicorns, having achieved a valuation of above $1 billion for a private company.
In this category are OPay, Jumia Technologies AG, Flutterwave, Interswitch and New York-based Andela, which just joined the rank on Wednesday after a fundraise shooting its valuation to $1.5 billion
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