Airtel Money CEO Talks High Stakes IPO

SPEAKER_1 (0:02)

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Caroline Heper (0:07)

Now I've been talking all morning about the big London IPO, the largest in five years. And joining me this morning is Charles Capel, our European Equity Capital Markets editor, who's helped us through this story over the past few weeks to think about this debut on the London Stock Exchange. And I'm delighted to say that we have with us Airtel Money's CEO, Ian Ferrao, to talk about this IPO. Welcome to Radio. Massively busy day for you as you list in London. What do you think is going to happen at the market open? What is your hope and expectation? Good morning.

Ian Ferrao (0:45)

Good morning and thanks for having me on. Look, this is one of those days where last night I had nightmares. You just don't want to see that thing go red. But look, things are in our favour this morning. I saw UK equities futures are up, oil price is down. Let's hope it's a great day on the floor.

We've been working towards this day for a long time and it's a very proud moment.

Charles Capel (1:06)

And so, I'm curious, the Equity Capital Markets Editor, when you've been building the book, when you've been selling the shares, what philosophy have you taken? What kind of investors have you tried to bring in to Airtel Money?

Ian Ferrao (1:18)

Yeah, look, and I think I said it a few weeks ago, we chose London because there's clearly deep capital available here and all of the major global funds are here.

And to be honest, we were proved right. The book is multiple times oversubscribed. I think we've got a fantastic book of all types of investors, but very strong support from Long Only. I think we've got emerging market funds in there, UK funds in there, even fixed income funds in there, given the generous dividend yield that we're probably putting out.

Charles Capel (1:46)

Have you managed to get much investment from the tech side? The tech investors have been buying?

Ian Ferrao (1:50)

Yeah, look, I think if you go into all of these global investors, they have multiple funds. And so when they aggregate, you see it coming from all of the different verticals. And we've been really impressed with what we've seen in the course of the last few weeks and the appetite for this type of investment across Africa.

Charles Capel (2:07)

And have you been tapping into some of those hedge funds as well, because they can be quite useful for helping liquidity when it starts trading?

Ian Ferrao (2:13)

Yeah, absolutely. I mean, there's a lot of great fundamental hedge funds out there, multi-strategy hedge funds out there as well. And I think we also went out with retail, and I was really impressed with the quality of the retail book as well. So I think we've got a fantastic book.

We're really excited about the new shareholders that we're bringing on board, and hopefully it's going to be beneficial for everybody.

Caroline Heper (2:32)

When you've been engaging with those people, what is the question that they have most frequently asked you?

Ian Ferrao (2:38)

I think the biggest question is, can we keep up the growth? We've got a track record of delivering a fantastic growth number. It's 32% US dollar growth over the last eight years consistently.

And the answer to that is, there is so much opportunity on the African continent. We're under-penetrated. There's a lot of customer growth. There's a lot of ARPU growth still to come. And we are moving into a digital era, and getting all of our customers onto our application is gonna be the next job that we all have to do.

Charles Capel (3:09)

And when you've been thinking about this listing, you brought in a cornerstone investor, the World Bank's investment fund. What was the idea behind that? How did you get them on board?

Ian Ferrao (3:22)

Look, we have a very strong relationship with the IFC as a group. They're very supportive across the various Bati enterprise organizations.

They work with Airtel Africa on a number of facilities. And when they heard that we were preparing the IPO, they were hugely excited. I mean, this is a business that ticks all of their boxes and is really creating financial inclusion across the continent where it's very much unbanked. So we were very keen to have them on board. They were very keen to come on board. Of course, that came with a very extensive due diligence process. And I think that can only be good for other investors coming on board, knowing that we have a name like IFC on the book.