Demand was huge for shares in Egypt’s MNT Tech Holding for Financial Investments with 43x oversubscription for the initial public offering (IPO) portion of the share sale and 11x oversubscription for the private placement. The company had a target to raise EGP 7.84bn ($142m). The shares started active trading on the Egyptian Exchange (EGX) on 20 October (ticker HALN.CA) and surged in price on the first day.
The initial public offering (IPO) and private placement price was EGP 24.50 ($0.44) a share. The shares closed at EGP 26.12 by the end of the first day after climbing 18% in early trading. closed on 21 October at EGP 25.80.
MNT Halan is a subsidiary of fintech success story MNT-Halan.
Netherlands-based MNT Investments B.V. had offered a secondary sale of 320m shares, about 20% of the capital, with 48m shares available in the public offer (15% of the sale) and 272m shares in a private placement. The offer opened on 7 October and closed on 15 October. The minimum IPO application was 100 shares.
Share sale results
According to reports in Arab Finance, including of a press release from EFG Hermes, demand for the IPO shares was 43.6 times the number of shares offered – in total, 41,500 applications were received for nearly 2.1bn shares, compared to the offer of 48m shares for retail investors. Pro rata allocations would be about 2.3% of the amount applied for.
The private placement closed on 13 October. The initial announcement said that subscribers included Egypt’s Commercial International Bank (CIB) for EGP 2bn ($36.2m) and London-based asset manager Redwheel for $20m (equivalent to EGP 1.1bn). According to the EFG Hermes press release, this was oversubscribed 11.2 times with 300 investors across 10 countries.
The prospectus allowed the private placement to be increased by 80m shares, boosting the transaction value to EGP 9.8bn ($177m). According to the EFG Hermes press release, after the offering MNT Investments B.V. would subscribe for a further EGP4bn of shares at the offer price, boosting the capital for expansion.
Another 24.3m shares were to be sold to senior employees, subject to approval from the regulators.
Mostafa Gad, Global Head of Investment Banking at EFG Hermes, said: “Delivering Egypt’s largest IPO since 2021 is a defining milestone for MNT-Halan and an important moment for the Egyptian capital market. MNT-Halan brings together leadership in core lending segments, a technology-enabled hybrid distribution model, and strong financial performance, a compelling proposition for investors seeking exposure to Egypt’s evolving financial services sector.”
Omar Radwan, EGX Chairman, said at the 20 October bell ringing: “MNT-Halan has demonstrated an inspiring model of how ambitious ideas and ventures can evolve into leading institutional entities capable of leveraging technology and innovation to serve millions of citizens. Today, through its entry into the capital market, the company reaffirms that the stock exchange offers the most efficient and equitable avenue for providing liquidity and financing future expansion through a diverse range of instruments, while strengthening its brand positioning and enhancing its corporate governance.”
Citigroup Global Markets Limited and EFG Hermes Promoting and Underwriting S.A.E. acted as Joint Global Coordinators and Joint Bookrunners for the Offering.
A previous giant IPO on the EGX was the Government’s sale of shares in E-Finance in 2021, which raised EGP 5.8bn (at that time $372m) – see ACMN story. The share sale price was EGP 13.98, it surged to EGP 19.51 on its first day. It recently closed at EGP 24.34.
Largest non-bank
MNT-Halan says it is Egypt’s largest non-bank financial services provider with about 1.9m active customers (Egypt’s population is 110m) and a gross loan book of EGP 46.7bn ($845m).
It was founded in 2018 by CEO Mounir Nakhla and CTO Ahmed Mohsen, who later linked with financial holding company MNT Investments B.V. to create the MNT-Halan group which also operates in Turkey (micro-leasing), Pakistan (bank) and the UAE (digital financing). The Halan app provides financial solutions including business and consumer loans, pre-paid cards, e-wallets and investments.
CEO Nakhla told Bloomberg in an interview that the new capital would allow MNT Tech to grow volumes and launch new services.
Egypt resilient
The Bloomberg report noted that the EGX market is resilient, despite the war on Iran and impacts spreading across the region. It noted that the benchmark EGX30 index has climbed almost 22% since the start of the year. Nakhla told Bloomberg he wasn’t concerned that regional unrest would undermine market gains: “Egypt has demonstrated a lot of wisdom in managing a very complex state of geopolitics, and we’re very, very confident in the steps the government is taking, both economically and geopolitically.”
The EGX gave provisional listing approval for MNT Tech on 14 September, provided it submitted the IPO application within six months.
Here is the MNT Halan investor relations website