MNT’s subscriptions open today at EGP 24.5 per share

MNT-Halan’s Egypt arm is coming to market at EGP 24.5 per share, according to its FRA-approved prospectus out yesterday, valuing MNT Tech Holding for Financial Investments at EGP 39.2 bn (c. USD 750 mn), by our math. At that price, the base offering of 320 mn secondary shares — good for 20% of the company — would fetch some EGP 7.84 bn (c. USD 150 mn) in gross proceeds.

Trading is expected to start on 20 October, founder and CEO Mounir Nakhla told Asharq Business (watch: runtime: 7:18). Nakhla said another anchor is chipping in — a London-based fund called Redwheel has also signed a cornerstone agreement for about USD 20 mn (c. EGP 1.05 bn). Together with CIB’s commitment of up to EGP 2 bn, that’s up to 39% of the base offering, by our math. Nakhla put it at “more than a third.”

Subscriptions open today and close in mid-October, with no per-investor cap below the full tranche size, according to an EGX notice. Institutional and high-net-worth investors can subscribe through 13 October for up to 272 mn shares, representing 85% of the offering (17% of the company), with minimum orders of EGP 10 mn for institutions and EGP 5 mn for wealthy individuals. Public subscriptions run until 15 October for the remaining 48 mn shares (15% of the offering, 3% of the company) with orders starting at 100 shares.

The float could get bigger still: The private tranche can be upsized by up to 80 mn shares, or 5% of the company, depending on demand, according to the prospectus. That would take the offering to 400 mn shares, or 25% of MNT, and up to EGP 9.8 bn (c. USD 187 mn) at the offer price, by our math. Any upsize needs FRA approval and has to be announced at least three days before public subscriptions close on 15 October.

SOUND SMART- This isn’t a bookbuild in the usual price-discovery sense. MNT is taking orders at a fixed EGP 24.5 a share, meaning the book will tell us how much demand there is and who gets what, rather than where the IPO prices. Much of that price discovery appears to have happened before launch, after months of investor soundings and roadshows across the Gulf, London, and the US. CIB had already committed up to EGP 2 bn as a cornerstone investor on 24 September, suggesting the valuation may have been largely nailed down by then. This means strong demand will show up in the coverage ratio (rather than the final offer price), and any underpricing will show up once the stock starts trading.

At a discount to fair value: The price is about 5.5% below the EGP 25.92 a share fair value set by independent financial advisor BDO Keys, according to the prospectus. It values MNT at about 20x its 2025 net income of EGP 1.98 bn, by our math, against the 28.5x Valu, its closest listed peer, ended the third quarter on, though MNT’s 1H earnings annualized below last year’s. Nakhla pitched the discount to foreign funds at the EnterpriseAM Egypt Forum on Monday, before the price was public, telling those who missed the bourse’s two-year run they can still get in cheap because “an IPO by definition is priced at a discount.”

ICYMI- Nakhla also said that half or more of what the parent company raises through the IPO will come back into the listed company through a capital increase of up to EGP 4 bn. The rest will fund the group’s Turkish business and an acquisition in an Arabic-speaking market he wouldn’t name. Had MNT tried to list in early 2024, he said, it would have raised just USD 30-40 mn, crediting the market for the timing. Investors are “much more comfortable about the macro,” he said.

Who’s locked in, and who isn’t: The parent MNT Investments B.V. must hold on to at least 51% of its stake, and no less than 25% of the company, for at least two years from listing, the prospectus read. CIB faces no such restriction. Its cornerstone agreement, covering up to 4.9% of the company at the offer price, comes with no lock-up or voting conditions, according to the prospectus. The bank can also pull out if a material event hits the group’s financial position, and gets the right to nominate a board member.

ADVISORS- Our friends at EFG Hermes are joint global coordinators and joint bookrunners along with Citi. Gibson, Dunn & Crutcher (US and English law) and Matouk Bassiouny & Hennawy (Egyptian law) are advising MNT-Halan and the selling shareholder. White & Case (US and English law) and MHR & Partners in association with White & Case (Egyptian law) are counsel to the bookrunners. KPMG Hazem Hassan is the auditor, while BDO Keys Financial Consulting is the independent financial advisor.