IPO-pedia | IHS falls on its market debut after $7 bln IPO

IHS Holding Ltd. shares fell on their debut in New York after an initial public offering valued the pan-African telecom-tower operator at almost $7 billion.

IHS Holding slumped 19% on its first day of trading after IPO.The deal raised $378 million for the company to fund growth plans.

IHS Holding, founded in 2001, is one of the largest independent owners, operators and developers of shared telecommunications infrastructure in the world.

It is based in Mauritius, making the initial public offering the largest in the U.S. by an African business.

It provides the customers, most of whom are leading MNOs, with critical infrastructure that facilitates mobile communications coverage and connectivity for 596 million people in emerging markets, across three regions and nine countries.

As of June 30, 2021, it operated 30,207 Towers across five countries in Africa, three countries in Latin America and one country in the Middle East. It is the largest tower operator in six of the nine markets in which it operate.

The towers firm's investors include Goldman Sachs, France’s Wendel and South African wireless carrier MTN.

MTN Group Ltd., Africa’s largest mobile-phone company, was the biggest shareholder in IHS with a 29% stake before the IPO.

According to a 2021 market research report by Verified Market Research, the global market for telecom towers was an estimated $39.5 billion in 2018 and is forecast to reach $114 billion by 2026. This represents a forecast CAGR of 14.54% from 2019 to 2026.

The main drivers for this expected growth are growing placements in off-grid and rural areas as well as continued smartphone penetration and need for internet and call services.

IHS generatedrevenue of $1,231.1 million and $1,403.2 million in 2019 and 2020, respectively, representing growth of 14.0%. Its net loss was $423.5 million in 2019 and $322.7 million in 2020.

The company's revenue was $763.6 million for the six months ended June 30, 2021 compared to $664.1 million for that one year ago, increasing by 15.0%.

For the six months ended June 30, 2021, it achieved a profit for the period of $77 million and adjusted EBITDA of $490 million, resulting in a profit margin of 10.0%.