Listed firms raise N768.7bn capital in three years

Companies that are publicly listed in the capital market have raised a total of N768.7bn capital in the last three years.

Data obtained from the Securities and Exchange Commission showed that these firms are listed on the Nigerian Stock Exchange and the NASD OTC Securities Market.

An analysis of the data showed that rights issue dominated the capital raising process as a total of N452.5bn capital was recorded from rights issue, which accounted for 58.87 per cent of the total capital raised.

A rights issue or rights offer is a dividend of subscription rights to buy additional securities in a company made to the company’s existing security holders.

When the rights are for equity securities, such as shares, in a public company, it is a non-dilutive pro rata way to raise capital.

In 2017, companies that raised capital via rights issue were NASD Plc, Guinness Nigeria Plc, UACN Property Development Company Plc, Livestock Feeds Plc, ARM Life Plc and Trans-Nationwide Express Plc.

Others were Unilever Nigeria Plc, Union Bank Plc, Consolidated Hallmark Insurance Plc, Morison Industries Plc, UAC of Nigeria Plc, Lafarge Africa Plc, Mutual Benefits Insurance Plc and CR Services (Credit Bureau) Plc.

NASD, Guinness, UACN Property Development Company, Livestock Feeds, ARM Life and Trans-Nationwide Express raised N194.3m, N39.7bn, N5.16bn, N1.1bn, N1bn and N223.7m, respectively.

Unilever, Union Bank, Consolidated Hallmark Insurance, Morison Industries, UAC, Lafarge, Mutual Benefits and CR Services raised N58.9bn, N49.7bn, N500m, N500m, N15.4bn, N131.7bn, N2bn and N500m, respectively.

In 2018, Flour Mills of Nigeria Plc, Fidson Healthcare Plc, May & Baker Nigeria Plc, Lafarge Africa Plc and Allianz Nigeria Insurance Plc raised N39.9bn, N7.5bn, N2.5bn, N89.2bn and N4.9bn, respectively, via rights issue.

In 2019, only Sovereign Trust Insurance Plc raised capital via rights issue.

Sovereign Trust Insurance in April, issued 4.2 billion shares at 50 kobo per share for subscription.

In 2018, four firms opted for private placement, and raised N68.2bn.

A private placement is a funding round of securities, which are sold not through a public offering, but rather through a private offering, mostly to a small number of chosen investors.

Private placement deals are a type of private placement.

Development Bank of Nigeria Plc, Providus Bank, Lagos Building Investment Company Plc and Consolidated Hallmark Insurance Plc raised N60bn, N6.5bn, N1bn and N734.5m, respectively.

Skyway Aviation Handling Company Plc was the only company to raise capital through an Initial Public Offering in 2018.

An IPO or stock market launch is a type of public offering in which shares of a company are sold to institutional investors and usually also retail investors.

It is usually underwritten by one or more investment banks, who also arrange for the shares to be listed on one or more stock exchanges.