Airtel Money weighs dollar denominated London IPO: report

Airtel Africa is considering denominating the planned London listing of its mobile money business in US dollars, Bloomberg reported on Friday, as it works toward one of London’s biggest new listings in years.

The company has already chosen London as its preferred venue for the Airtel Money IPO and is targeting a listing in the second half of 2026.

Airtel Africa has not announced a final decision on the currency.

Previous reports have put Airtel Money’s potential valuation at around $10 billion, with the offering expected to raise between $1.5 billion and $2 billion. Airtel Africa has not confirmed either figure.

Airtel Money operates across Airtel Africa’s markets in sub-Saharan Africa, but the parent reports its financial results in US dollars. A dollar listing would put the shares in the same currency investors already use to read the company’s accounts and compare its performance across countries.

It would also fit Airtel Africa’s stated reason for choosing London in the first place, which was to reach a broad international investor base.

It would not, however, make Airtel Money a dollar business. Most of its customers earn, spend and transfer money in local currencies, and exchange-rate movements continue to feed into the numbers Airtel reports.

That was visible in the latest quarter. Airtel Money revenue rose 38.9% in reported currency to $404 million in the three months ended 30 June, but the increase was 25.8% at constant exchange rates. EBITDA rose 29.3% to $198 million, giving the business a 49.1% margin.

The business itself is now large enough for Airtel to make a credible case for a standalone valuation.

Airtel Money had 56.5 million active customers at the end of June, up 23.3% from a year earlier. Its annualized processed transaction value exceeded $245 billion, while mobile money accounted for 21.8% of Airtel Africa’s quarterly revenue.

The more interesting comparison goes back to 2021. TPG’s Rise Fund invested $200 million in Airtel Money that year at a cash-and-debt-free valuation of $2.65 billion.

At the time, the business was producing $110 million of quarterly revenue and $54 million of EBITDA. Airtel Africa also said it intended to explore a listing within four years.

A $10 billion IPO valuation would be almost four times that 2021 figure.

Annualizing the latest quarter gives revenue of about $1.62 billion and EBITDA of about $792 million. At a $10 billion valuation, that works out to roughly 6.2 times revenue and 12.6 times EBITDA. In 2021, the $2.65 billion transaction valued the business at about six times annualized revenue and 12 times annualized EBITDA.

It is not a perfect comparison. The 2021 transaction was quoted on a cash-and-debt-free basis, while the final IPO structure and valuation have yet to be disclosed.

There is another reason the listing matters. When TPG invested, its agreement included a right to sell its shares back to Airtel Africa at fair market value in limited circumstances if an IPO did not happen within four years.

Mastercard later invested as well. Airtel Africa said last year that it had agreed with TPG and Mastercard to push back the date on which their put options could be exercised by 12 months.

So the IPO is not only about giving Airtel Money a public valuation but also provides the cleanest route to liquidity for investors who came into the business five years ago.

Bharti Airtel Ltd has meanwhile been moving in the opposite direction, increasing its exposure to Africa before the proposed listing.

Its board approved a share swap designed to lift its effective stake in Airtel Africa from 62.73% to as much as 79.04%. In explaining the transaction to shareholders, Bharti specifically pointed to the Airtel Money IPO as an opportunity for “significant value unlocking.”