Banque du Caire Prices IPO at EGP 5.30 Following Record Demand

Banque du Caire priced its initial public offering (IPO) at EGP 5.30 per share, the highest point of its price range, after institutional investor demand reached EGP 205.8 billion, according to a disclosure to the Egyptian Exchange (EGX). The private placement tranche of the offering was covered 6 times, or 19.8 times excluding cornerstone investors, with a total value of EGP 34.55 billion.

A 45% stake of the bank's capital was sold, raising approximately EGP 36.37 billion, and valuing the bank at around EGP 80.83 billion. Institutional investors were allocated 95% of the offering, while four foreign sovereign wealth funds, along with the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD), secured about three-quarters of the private placement tranche, according to Enterprise calculations. Both institutions are participating with $100 million each, conditional upon the closing of the offering.

Banking analyst Hany Aboul Fotouh said the final price matches the fair value determined by independent financial advisor Baker Tilly at EGP 5.30, adding that any surge after trading begins will require real demand and sufficient liquidity. The research unit at Arab African International Securities set a fair value of EGP 7.8, while Ostoul estimated it at EGP 6.55, with the stock trading at 4.6 times historical earnings compared to a peer average of 4.2 times.

The proceeds of the offering will go to Banque Misr rather than the Treasury, but officials are relying on them for the final review of the International Monetary Fund (IMF), which requires around $1.5 billion from asset sale proceeds before the program ends on December 15. Trading in the stock begins on November 2, while retail subscription closes on October 28 with execution on October 29, after the EGX30 index fell by 1.66% in the previous session.

What Do These Terms Mean?

Initial Public Offering (IPO): The sale of a stake in a company's shares to the public for the first time on a stock exchange, making the company listed and allowing its shares to be freely traded.

Offering Coverage: The ratio of orders placed for the offered shares. A 6x coverage means investors requested six times the available quantity.

Fair Value: An estimate of a share's fair price issued by an independent financial advisor based on the company's earnings, assets, and expected performance.