Africa-Press – Kenya. Hours to the close of Kenya Pipeline Company (KPC) share sale, fund managers and capital market analysts are sharply divided on a fair offer price.
While lead transaction advisor, Faida IB and broker, Dyer & Blair believes that the Sh9 is ideal, the majority of fund managers insist that the offer is grossly overvalued, linking the high price to reported under subscription.
Early this week, a local daily reported that various fund managers are allegedly struggling to sell the oil transporter’s shares, saying the subscription rate was less than 15 per cent.
On Wednesday, Kestrel Capital threw a spanner in the works, handing KPC shareholders a fair value of Sh12.12, 35 per cent above the Sh9 offer.
The Nairobi-based brokerage firm, recently picked by Safaricom to facilitate online trading of NSE-listed shares, is pegging the premium review on tariff review gains, volume growth from capacity expansion and fibre optic revenue.
It has, however, warned that near-term drag from capital expenditure freezes and tariff approval delays could hinder the price value.
“Key risks include governance weaknesses, East African Crude Oil Pipeline (EACOP) for Uganda export and pending legal settlements running into billions of shillings,’’ Kestrel Capital says in its analysis.”
The highest valuation by Kestrel Capital is coming just days after Uganda-based counterparts, Crested Capital, Old Mutual Uganda and Sterling Capital handed the offer the lowest values of Sh4.61 and Sh3.70, respectively.
Earlier on, SIB capital valued the share at Sh8.23, Pergamon Sh6.55, NCBA IB Sh6.35 and Ind Analysts Sh5.41.
On Thursday, capital market enthusiasts flocked to social media to critique valuations by fund managers. For instance, X user, @Kenyan Optimist, called out Kastrel for making a lot of assumptions in its pricing model.
“Long-term buy pegged on Uganda oil export does not seem solid enough,’’ he tweeted.
He insists that the fund manager must desist from giving an opinion on the offer price as it is conflicted. “They are agents via Ziidi App. This is propaganda valuation,’’ he said.
Another user, @GibsonK, who describes himself as a capital market enthusiast, says that the valuation of Sh9 per share is way too high, considering that it is projected to fall to Sh6.50 before it stabilises.
Other critics argue that the valuation might be rich for a company whose fortunes are tied so tightly to policy whims and fuel demand volatility.
The Kenyan government floated a 65 per cent stake of the strategic oil facility to the public mid last month, hoping to net close to Sh106.3 billion to be applied within the national budget framework as seed capital for priority national infrastructure, strategic investments, and fiscal consolidation.
It will retain 35 per cent ownership, which will be subject to a 24-month lock-in period to ensure continued strategic oversight of the national energy artery.
Yesterday, KPC revised settlement terms for investors using Irrevocable Bank Guarantees in its initial public offer, extending the final payment deadline to March 6, 2026, and lengthening bank settlement timelines after approval by the Capital Markets Authority (CMA).
Large domestic institutions typically use Irrevocable Bank Guarantees; oil marketing companies, pension funds, and cross-border investors that settle after allocation rather than funding applications upfront.
Under the revised terms, the final date for payment under Irrevocable Bank Guarantees for both domestic and international investors moves from March 5 to March 6.
In addition, the standard guarantee form now allows guarantor banks up to 48 hours to settle valid payment demands, replacing the earlier 24-hour requirement, with a firm cut-off set at 3:00 p.m. on March 6.
It also amended the assignment clause within the bank guarantee that now requires prior written consent from the guarantor bank before any transfer of rights, tightening contractual certainty for institutions issuing the guarantees.
It previously allowed the company to assign or transfer rights under the guarantee without consent.
The IPO is strictly segmented: 20 per cent for local retail, 20 per cent for local institutions, 20 per cent for East African investors, and a strategic 15 per cent for oil marketing companies to lock in their loyalty.
