Ethio telecom's IPO Raises 3.2b Br in Landmark Offering, But Misses Ambitious Target

Ethio telecom, the state-owned telecommunications giant, raised 3.2 billion Br from its landmark initial public offering (IPO), closing on February 14, 2025. The IPO, the first of its kind in the country, offered investors 10.7 million shares.

Prime Minister Abiy Ahmed (PhD) unveiled the IPO on October 16, 2024, at the Sheraton Addis Hotel, with ambitions to raise 30 billion Br, giving Ethio telecom an estimated valuation of around 300 billion Br.

Despite robust investor interest, the final amount fell short of the initial target due to strict limitations placed on potential buyers.

Friehiwot Tamiru, CEO of Ethio telecom, acknowledged these restrictions when announcing the IPO results at a press conference today at Skylight Hotel on Africa Avenue (Bole Road). She praised the 47,377 investors who participated in the first round, noting their contributions were safely deposited into a secured account.

The IPO initially allowed individual investors to purchase a minimum of 33 shares valued at 9,900 Br, and up to 3,333 shares for a maximum investment of 999,900 Br.

According to Friehiwot, the company now plans a second offering round to sell the remaining shares. She disclosed that the next round will ease earlier constraints, allowing institutional investors such as banks, as well as Ethiopian residents interested in buying shares worth more than a million Birr, to participate.

“Restrictions will now be loosened,” she said. “Many individuals, including foreign investors, have expressed interest.”

Opening the IPO to foreign buyers, however, requires a government decision, Frehiwot told Fortune.

Ethio telecom began selling shares in October last year, with investors initially able to purchase through January 3, 2025. By that initial deadline, 43,848 investors bought 8.78 million shares valued at 2.64 billion Br. Following requests to extend the IPO period, authorities granted an extension until February 14, which attracted an additional 3,529 investors who purchased another 1.87 million shares worth approximately 571.7 million Br.

According to Friehiwot, this partial privatisation allows Ethiopians a unique opportunity to own a stake in one of Africa’s most profitable telecom markets.

“We’ve already started the process of being publicly listed on the secondary market,” she said.

The next steps for Ethio telecom include communicating with investors, registering shares with the Central Security Depository (CSD), and officially listing on the Ethiopian Securities Exchange (ESX) for secondary market trading.

With a subscriber base of 78.3 million, Ethio telecom controls roughly 94.5pc of Ethiopia’s telecom market. Its market dominance comes largely from substantial infrastructure investments, which include over 8,538 network towers and an expansive fiber-optic network stretching across the country.

Ethio telecom’s annual revenue rose to 91.4 billion Br this year, up from 71.5 billion Br in 2023, demonstrating robust growth across its service segments.