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Monday, 15 August 2022

Ghazl El Mahalla has another two weeks to land its micro-IPO

The retail component of Ghazl El Mahalla’s IPO has been extended for another two weeks until 28 August due to weak investor demand, according to an EGX bulletin. Subscription was supposed to close yesterday, but the football club has so far only received bids for around 22% of the shares allocated to the public, Mohamed Maher, CEO of bookrunner Prime Holding, told Masrawy yesterday. Maher blamed poor market conditions for the slow uptake, which has already seen the deadline extended once this summer.

Where things stand: The club has allocated 98 mn shares to the retail component of the IPO and is selling them for EGP 1.02 apiece. It has raised just EGP 22 mn from between 600 and 700 investors since subscription opened almost two months ago, the news outlet reported Maher as saying.

This is the second time the deadline to close the retail component of the offering has been pushed. The football club extended the offering by six weeks at the beginning of July after receiving bids for less than 10% of the shares on offer in the original three-week subscription period. It also opened up the public offering to institutional buyers by allowing investors to purchase up to 15 mn shares, up from an original cap of 2 mn.


#1- It’s a tough time for new listings. The EGX 30 has fallen more than 16% this year as global markets struggle due to the conflict in the Ukraine, inflationary pressure, rising interest rates, and a deep correction in many high-profile western markets.

#2- This share sale is tiny and potentially consequential only in the sense that it might convince other clubs (we’re looking at you, Al Ahly) to go public.

BACKGROUND- Ghazl El Mahalla is offering a 67.5% stake in its IPO, which is expected to raise EGP 135 mn. The club raised EGP 37 mn during the institutional component of the offering in November.

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