Real fear is catching me on this IPO. Credible insider information that I am getting isn’t giving me serious confidence.
Alhaji has spent his business taking massive risks. In fact, this Refinery is considered one of the biggest gambles in his career or that of any one individual
It is countries that take these kinds of risks, but he took it, and it paid off
Like an addict, he pushed the boundaries with the IPO – the biggest ever on the continent- with a push to pull in over 10m shareholders – even Africa’s most profitable and biggest exchange- managed to scrap 10m equity holders
The IPO opened to fanfare; Alhaji turned into a Skit Maker and Content creators amongst others to sell his IPO
They built the most robust distribution platform from digital to traditional to sell. Everyone jumped at it, from Banks to Baba Alajo Shomolu hawked the IPO, and we were told that trillions were raised on the first day – unconfirmed sources have said what was raised was far from what was announced
Insiders have told me that all is not well in Camelot, that the IPO is stuttering.
I have not confirmed the insider information and do not have any plans to, but as a detached analyst, I can guess a stuttering
Now, whether the stuttering is of the dimensions I’m being told is a different story
Let me tell you why – since I broke the news that the announced two-week extension portends challenges with meeting targets, I have been inundated by calls from both sides
One side says that the IPO has been oversubscribed and that, according to the official position, they are only extending to allow other Africans to participate and to also have more retail investors
The other angle says – na lie. That the offer is in bad shape and that the extension is to give it enough time to push
What are my thoughts
The IPO is STUTTERING, this is my personal opinion, not backed by any official position, but based entirely purely on my reading of the tea leaves
First, the media campaign is intensifying, throwing up the spectre of desperation
Second, if you are oversubscribed, you will begin to strategise on allotment, which in an IPO of this nature would be a huge headache, so it will not be this time that you would be revving the engine harder
I think book building has failed. Book building in Investment banking is institutional pre-sale offers.
I think large institutional investors after the private placement, have lowered their thirst and have either reduced their initial orders or even turned back totally
The private placement, in which investors bought at a price lower than the IPO price, would have seen an arbitrage opportunity and may have taken advantage, losing grip on the IPo and weakening thirst
These issues on top of a high debate on pricing of the IPO and other such challenges may have put us in a situation where we are extending by two weeks
Kindly note that a two-week extension is actually four weeks, as they are entitled to two weeks of collation within which institutional investors would redeem their bets, and this is why I am saying that Book building may have collapsed cos they are seeing from today where they would end, hence the rush to the SEC’ to get approval for an extension
The global uncertainty around the markets throws up a double-edged sword, and this makes large institutional investors whose portfolios usually have a sturdy foundational long-term predisposition jittery.
The short-term spike in crude prices, occasioned by global uncertainties, throws up huge profit projections for the refinery but, at the same time, throws it up as a vulnerable target, making a long-term player play cautiously with its stock not having the temperament for volatility
Then the talk about 10m shareholders having a thin vertical flat spread to ensure control also falls flat cos the refinery has one of the lowest floats in any market in the world – nothing any of u can do even if u are 50b shareholders;, control is nestled very strongly with Alhaji and his beautiful daughters
So was this a beautiful risk for Alhaji?
YES, cos for him, his benefits are plenty – claw back some cash, diversify some part of holding to show shareholder spread even though cosmetic, cement his position on the Forbes list thereby pushing his brand stronger
Was this a good buy for an institutional investor?
I would say it depends on board-approved investment management policy, regulatory oversight and outlook towards risk
An institutional investor with an obtuse look at risk would be cautious and enter timidly, but an aggressive portfolio will enter quickly, seeking to flip at the slightest opportunity
The retail investor?
Good buy. Very good buy. Just buy and hold on and be waiting for dollar-linked dividends or bonus shares, if any
But on the whole, I think Alhaji will suffer a bruised ego at the end of the offer cos he will not meet his 10m shareholders target and may struggle to achieve a full subscription
I predict a 70-80% subscription rate, but don’t go to sleep, cos there is capacity from within to cover that gap, thru Trust or other such type vehicles
In all, fear is still catching me for this IPO, I swear
Come and beat me
Thanks
Duke of Shomolu
Last modified: October 16, 2026
