Construction company Société Générale des Travaux du Maroc (SGTM) is to list on the Bourse de Casablanca tomorrow, 16 December, after 34 times oversubscription for its giant initial public offering (IPO) of shares.
There were nearly 173,000 subscribers and total demand was MAD 171 billion ($18.6bn). The share offer succeeded in its aim to raise MAD 5.04 bn ($548m) through the sale of 12m shares, representing 20% of the company’s capital, at a unit price of MAD 420 each with deductions for some categories of investors such as employees.
SGTM was founded in 1972 by businessmen Ahmed and M’hammed Kabbaj (according to this Ecofin news agency story) and has completed over 1,000 flagship projects including bridges, roads, ports, airports, hospitals, stadiums and industrial facilities. It employs more than 21,000 people and runs a fleet of 2,500 machines. It also operates in six other African countries: Senegal, Côte d’Ivoire, Burkina Faso, Cameroon, Benin, Tanzania and Guinea.
Financial advisor and global coordinator is Attijari Finances Corp (investment bank of Attijariwafa Bank), lead manager of the placement syndicate is Attijari Intermédiation and co-lead managers are BMCE Capital, Saham Capital Bourse, CFG Bank Capital Markets and Upline Securities.
Listing gives access to future capital
Mohammed Idriss Berrada, Managing Director of Attijari Finances Corp, told a press conference this share offer was to raise capital to grow, rather than a sale by an existing investor. This report on Medias 24 added that the listing would be useful for a future capital increase if SGTM tackles any major investment projects, such as merger and acquisition or a giant industrial development. It also gives details of further finance for giant construction projects, including project bonds that could be listed and bank finance.
Berrada was reported as saying: “Financial agility is precisely what gives us access to these markets. We have seen it in other listed companies.. The IPO serves two objectives: to institutionalize and ensure sustainability, and to achieve a financial objective, being present in the market and able to react when needed”.
The prospectus highlights a robust pipeline of contracted projects for the coming years, both in Morocco and in several other African countries where it already has presence.
SGTM says it will use the IPO to strengthen its structure, attract new partners, improve transparency and enhance its visibility both nationally and across the continent. The share offer also motivates and incentivizes employees by involving them in the company’s performance and enabling them to share directly in the value created.
The offering share price varied according to the investor category: MAD 340 per share for Order Type I (eligible employees and retirees), MAD 380 for Order Type II and MAD 420 for qualified investors under Order Types III and IV.
It is Morocco’s second largest IPO, surpassed by the sale of 14.9% of Maroc Telecom in 2004 which raised MAD 8.9bn ($1.07bn) before listing on the Bourse de Casablanca and on Euronext Paris. The other IPOs this year include: health company Vicenne which raised MAD500m in an offer that was oversubscribed 64 times before listing in July; and fintech Cash Plus which raised MAD 750m and listed on 8 December.
Confidence in the Bourse
An article on Daba Finance concludes: “The depth of demand suggests rising confidence among retail and institutional investors, supported by stable macroeconomic conditions and renewed issuance momentum.
“Construction and infrastructure companies have traditionally attracted less market attention than telecoms or financial services. SGTM’s reception signals a shift, with investors seeking exposure to sectors linked to public works, transport, and long-term development spending.
“The transaction also shows the Casablanca Stock Exchange’s capacity to mobilize domestic savings at scale. Recent offerings point to a widening investor base and stronger participation from individuals, a trend regulators and market operators have been seeking to encourage. With multiple large listings completed or underway, the exchange is positioning itself as a more active source of growth financing.
Photo Tanger Med Port, where SGTM was joint winner of a tender for EUR 500m ($587m), source Tanger Med Port Authority.