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.
There has been a hiatus of three years in the IPO market of the exchange, and the plan to will encompass softening preconditions like previous achievements of profitability as well as filing of earnings reports on a quarterly basis.
“If you are looking to attract growth companies that are in their early stage, quite clearly having a profitability test is a major hindrance,” said Olumide Bolumole, divisional head of listings business at the bourse, on Thursday at a virtual meeting.
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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.