The I&M Bank Rwanda initial public offering (IPO) has been oversubscribed by 209 per cent, a development Amb Claver Gatete, the Minister of Finance, attributes to growing investor confidence in the local economy.

"The huge success of I&M Bank Rwanda IPO is testimony of the confidence investors have in the Rwandan economy generally and the bank in particular,” he said. "This great performance of the IPO also gives credibility to government’s privatisation programme,” he added.

Government sold its 19.81 per cent stake equivalent to 99,030,400 shares it held in the bank to the public between February 14 and March 10 as part of the ongoing privatisation programme. It targeted to raise Rwf11.5 billion from the sale. The money will fund construction of Bugesera International Airport in Bugesera District, according to the minister.

Privatisation programme

The sale is part of government divesture programme of state-owned enterprises, which kicked off in 1997 with a total of 72 institutions earmarked for privatisation.

The objective is to reduce the shares held by government in public companies and thus help ease the financial burden on its resources and reduce its administrative obligations in the enterprises.

The bank shares will be listed on the Rwanda Stock Exchange equity market on March 31. The firm’s IPO price was at Rwf90 per share.

I&M Bank will be the fourth local firm to list on the RSE, and the eighth counter.

Presently, there are three local firms listed on the bourse - Bank of Kigali, Bralirwa and Crystal Telecom. Four Kenyan-based firms, Uchumi Supermarkets, Equity Bank, NMG, and KCB, are cross-listed on RSE.

Gatete added that government encourages investment by ordinary Rwandans in successful companies through the capital market to support the development of the country’s young financial market.

"We are confident that the listing of the bank shares on the Rwanda Stock Exchange will contribute to the growth of local capital market,” Gatete said.

Share allotment

Jonathan Nzayikorera, the chairperson of the capital markets privatisation committee at the Ministry of Finance and Economic Planning, has said a total of 206,893,000 applications were received, way above the 99,030,400 shares that were on offer, which represents an oversubscription rate of 209 per cent.

Nzayikorera told The New Times yesterday that the IPO attracted domestic, regional and international investors, adding that allotment of shares to successful applicants has also been completed.

He said 60 per cent of the shares were allocated to Rwandan and East African investors, including the bank’s employees, while the remaining 40 per cent were given to foreign investors.

The successful applicants will be notified of their allotment by mail on March 27.

The refund process for the oversubscribed shares will be done on the same day, according to Nzayikorera.

"This will be done through electronic funds transfer and SWIFT to accounts indicated in the investor’s application forms,” he said.

He added that the shares for successful applicants will be electronically credited to their respective Central Securities Depository (CSD) accounts by March 27.

About I&M Bank

The financial institution was the first commercial bank to open shop in Rwanda in 1963. In 2014, it was sold to a private equity firm and later bought by I&M Bank of Kenya.

The I&M Group operates a total of 74 branches around East Africa, with 16 in Rwanda. The Group has majority stake in the bank.