Investors in Dangote Petroleum Refinery and Petrochemicals FZE’s initial public offering face a wait of at least three weeks to learn how many shares they have received.
On the company’s indicative timetable, shares are unlikely to reach CSCS accounts or begin trading on the Nigerian Exchange before early December.
The offer of 4.1 billion new shares at N525 each closed on Tuesday, October 27, after the Securities and Exchange Commission approved an extension from the original October 13 deadline.
The offer “now moves into post-offer processing and regulatory approvals”, the refinery said in a closing statement.
It added that a subscription receipt “does not confirm how many shares you will be allotted”.
Reuters reported orders of about N6.4 trillion ($4.78 billion), citing two people familiar with the deal. That is about three times the N2.15 trillion base offer, on MoneyCentral calculations. The company has not confirmed the order book.
The Road to Your CSCS Account
The company has set out six stages on its IPO portal. The dates below are from its revised timetable, and those after November 17 are counted in business days.
| Stage | What happens | Indicative date |
|---|---|---|
| Application collation | Registrars collate and reconcile subscription returns | November 3 |
| Basis of allotment filed | Issuing houses submit the allotment proposal to the SEC | November 10 |
| SEC no-objection (“Allotment Date”) | Allocation per applicant is fixed | November 17 |
| Allotment announcement | Results published; net proceeds transferred to the refinery | November 18 |
| Refunds | Surplus or rejected application money returned | About November 24 |
| CSCS crediting and listing | Shares credited; trading begins on the NGX main board | About December 8 |
Why You May Get Fewer Shares
If the offer is oversubscribed, applicants will receive fewer shares than they applied for. The prospectus allows the issuer to absorb extra demand, subject to SEC approval.
Reuters reported that up to 30% of the offer could be absorbed. Taking up an extra 30% would lift the offer to 5.33 billion shares, or about N2.80 trillion, on MoneyCentral calculations.
Even then, reported orders would be roughly 2.3 times the enlarged offer, so a large share of application money could still be refunded.
In the refinery’s private placement earlier this year, it absorbed $1.5 billion above the offer size and refunded $1.2 billion.
Aliko Dangote has said he plans to protect small retail applicants of 50,000 shares and below and scale back large orders, but the refinery has not published its formula.
Analysis: The Cost of Waiting
For investors who borrowed money or sold other assets to subscribe, the timetable matters. Application money tied up from as early as mid-September earns nothing until refunds arrive around late November. At current Treasury bill yields, that delay has a real cost.
The listing date also affects the wider market.
A refinery valued at around $49 billion, would become one of the largest stocks on the NGX at debut. Index trackers and fund managers would need to make room for it. That could put pressure on other large-cap stocks in the weeks before trading starts.
Refunds may also have an effect. If more than N3 trillion in surplus application money returns to investors in late November, some of it could go back into equities and fixed income ahead of the listing.
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