Ethio Telecom’s IPO Left Hanging with Just 10.7% of Shares Sold

Six months after issuing 100 million ordinary shares in Ethiopia’s first-ever Initial Public Offering (IPO), Ethio telecom has announced that it sold just 10.7 million of them. The share sale, originally scheduled to run from October to January, was extended by five weeks, closing in February.

At a ceremony held Friday afternoon at the Skylight Hotel, CEO Frehiwot Tamiru revealed that 47,377 investors participated over 121 offer days, purchasing shares valued at 3.2 billion birr.

“Decisions on the rest of the shares are currently ongoing,” she said.

Frehiwot also noted that interest came not only from individuals but also from banks and Ethiopian-born foreign nationals. However, in response to reporters’ questions, she confirmed that only individual investors had actually participated in this round.

"The reasons for limited sales were the restrictions we imposed," the CEO said.

Funds collected so far will remain in a blocked account. Eligible investors were required to purchase a minimum of 33 shares (valued at 9,900 birr) and up to a maximum of 3,333 shares (999,900 birr), with each share priced at 300 birr.

Ethio telecom is one of five state-owned enterprises slated to list shares on the Ethiopian Securities Exchange, which was launched in January, three months after the telecom’s IPO. However, Wegagen Bank, a private bank that also launched one of Ethiopia’s first investment banks, became the first company to list on the new exchange with 6.2 million shares. The Exchange has announced plans to list up to 50 companies within the next five years.

Frehiwot acknowledged the need to cultivate greater public awareness around capital markets to ensure wider participation in future offerings.

The muted public response is the latest setback in the government’s broader plan to partially privatize Ethio telecom. 

Ethiopia initially launched a tender for a 40% stake in Ethio telecom in June 2021, but economic headwinds led to its suspension in March 2022. The process was revived in November of that year. Despite reported interest from Emirates telecommunications Group and France’s Orange, both eventually walked away from bidding.

Ethio-tel is part of the 40 state-owned enterprises under the management of Ethiopian Investment Holdings, the country's sovereign wealth fund.