People & Money

MTN Shares Oversubscribed By 139%. Why MTN Is So Hot

The PSB license, which essentially makes the telecoms giant a Fintech player in Nigeria, is a potentially massive new source of revenue and driver of future growth for MTN Nigeria”.

The 575 million shares held by MTN Group in MTN Nigeria and offered for sale to Nigerian investors in December 2021 were oversubscribed by 139%, according to a press statement issued by MTN Nigeria Secretary, Uto Ukpanah.

The disclosure revealed that the offer was oversubscribed with valid applications for a total of 801.97 million units, leading to the activation of the approved additional 86.25 million units of shares to meet investors’ demand.

According to Mr. Karl Toriola, MTN Nigeria’s Chief Executive Officer, the number of current shareholders has increased by 11.6 times since the offer. MTN Nigeria was also the first company to sell fresh shares to the public via digital platforms.


Also Read: Top 5 Nigerian Stocks To Look Out For In 2022

Key Insights on the Offer

  • Due to oversubscription by investors, a total of 661.25 million MTN Nigeria shares were subsequently allotted, as opposed to the 575 million units that were originally anticipated.
  • A total of 126,720 retail investors obtained the full allotment of shares after submitting valid applications. While institutional investors such as pension funds, portfolio managers, insurance firms, and enterprises who participated in the offering of the shares were allotted 72.09 % of their applications.
  • The incentive structure of one free share for every 20 shares acquired remains in place, and the extra shares will be distributed to concerned investors who are expected to hold the shares for a period of 12 months, until January 31, 2023.
  • MTN Group’s stake in MTN Nigeria presently stands at 75.58%, down from 78.83% before the offering.

Why MTN Nigeria shares were oversubscribed

At the close of the December shares offering, Retail and Institutional Investors (Pension Funds Administrators, Insurance Firms, Corporates, and Asset Managers) expressed strong buying interest in MTN shares which is evident in the oversubscription rate of 139%.

We believe that the bullish interest in MTN stocks is due to the following key factors:

  • MTN Nigeria Plc has consistently outperformed its peers in the telecom industry in terms of customer base, revenue and profit. In its Q3 2021 results, the company grew profits by 53% after generating NGN1.2 trillion in revenue. MTN Nigeria met investors’ expectations of stellar performance for the full year (2021). The company grew revenue by 23% year-on-year, from NGN 1.3 trillion in 2020 to NGN1.6 trillion in 2021.


  • Last year, the CBN granted MTN Nigeria a payment-service bank (PSB) license to speed up its mobile money payment services, as well as a 5G license to support MTN’s 5G deployment in Nigeria. The 5G licenses will endear MTN to high-spending customers, including businesses, who want more reliable internet access, thus positioning MTN to capture a bigger chunk of the exploding demand for data services. The PSB license, which essentially makes the telecoms giant a Fintech player in Nigeria, is a potentially massive new source of revenue and a driver of future growth for MTN Nigeria.


  • MTN Ghana, for example, earned $216.4 million from its MoMo (Mobile Money) service, processing transactions valued at $152 billion in 2020. This implies that MTN Nigeria could earn over NGN N2 billion on mobile money services as a result of the PSB license approval. But this is a very conservative estimate based on the MoMo income in Ghana. Nigeria is a much larger market where only 5.6% of people aged 15 and above have a mobile money wallet, compared with 39% in Ghana.


MTN will marry its over 65 million subscriber base, more than double Ghana’s population of 30.8 million,         with its huge marketing budget and nous, to scale rapidly the adoption of mobile money service by Nigerians from the current very low base. MTN’S MoMo generates $12 in monthly average revenue per user (ARPU) in Ghana; if MTN Nigeria gets 10% of its Nigerian subscribers i.e. 6.5 million people, to use its mobile money service, this would translate into $936,000,000 revenue annually assuming each of the Nigerian subscriber can generate $12 monthly ARPU.


  • MTN Nigeria has a history of creating value for shareholders through dividend payments. This is an important attraction even for long-term investors who primarily are after dividend yields. Less than a year after it was listed on the Nigerian exchange in 2019, MTN paid NGN7.92 per share to every investor. This figure increased by 30.5% in 2020 when MTN Nigeria paid NGN9.40 per unit. The company has also declared a total dividend payout of NGN13.12 per share in 2021, an increase of 39.5% from 2020.



  • In 2021, the Nigerian telecommunications industry will continue to be a positive contributor to the Nigerian economy, accounting for over 10% of the country’s GDP. So far, the global pandemic has supported growth in the telecoms sector by intensifying the usage of digital channels for shopping and meetings/remote working. More people now also use social media for longer. These new usage trends will largely survive the pandemic providing upside for MTN which grew data usage per subscriber by 62% in 2021 and increased data revenue by 55.3% year-on-year to NGN516.21 million. The performance of mobile money services, the country’s demographics, social media usage, and telecom companies’ investment with anticipation for a 5G rollout will, in our opinion, affect the telecommunications sector’s growth in 2022. MTN Nigeria, which has 41.7% of the internet market share as of Q3, 2021, is well-positioned to gain from the telecom industry’s growth possibilities.

MTN Nigeria’s management is strategic and resilient, constantly repositioning to capture and create opportunities for growth.  As a result, we maintain our bullish forecast for the stock.

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