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Tuesday, 6 August 2019

Fawry IPO’s retail offering 30x oversubscribed

IPO WATCH- Fawry’s retail offering oversubscribed 30x: E-payments platform Fawry successfully completed the book-building process for its initial public offering, with the retail offering closing yesterday around 30x oversubscribed, the local press reported. The retail tranche covered 5% of the company’s shares. The company also sold 21.2% to strategic investors as part of a pre-agreed transaction: state-owned banks Banque Misr and the National Bank of Egypt were both offered 7% stakes, while EM PE giant Actis was offered 7.2%. The remaining 9.8% was allocated in a private placement to institutional investors, which closed 15.9x oversubscribed earlier this week. Shares are expected to begin trading on Thursday at EGP 6.46.

Investors attracted by strong growth prospects: “The subscriptions for both the public and private offerings for Fawry were large and strong because the industry itself is new to the market and has greater than average growth,” Radwa El Swaify, head of research at Pharos, told Reuters. “The view of investors this time around is towards the long-term payoff and not the short-term.”

Advisors: EFG Hermes is global coordinator and bookrunner. Zulficar & Partners is serving as the offering’s local counsel, while Zaki Hashem & Partners is local counsel to the issuer.

Background: Fawry is selling 36% of its shares in Egypt’s first IPO since last October, when Sarwa Capital went public amid the EM sell-off. The company’s debut on the EGX this week is largely seen as a litmus test for an otherwise anemic IPO market that has seen several companies put off their plans to go public. The IPO could set the tone for the market ahead of other planned offerings, including those in the state privatization program.

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