Geregu Power reports 10% growth in profit on first day of listing

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By Philemon Adedeji

Despite a sustained bearish market occasioned by the build-up to the 2023 general elections and interest rate hike, a leading power generation company Geregu power plc (Genco) in Nigeria gained total sum of N25 billion in first day of listing, reflecting an improvement of maximum of 10 per cent.

Nigerian Exchange Limited (NGX) announced the listing by the introduction of a power firm on the main board of the Exchange on Wednesday, 5 October 2022.

A total of 2.5 billion ordinary shares of Geregu were listed at N100 per share, under the Utility sector 2 and Electric Power Generation sub-sector of NGX, with the trading symbol, GEREGU.

Geregu Power, a leading power generation company (GenCo) in Nigeria, is the first GenCo to be listed on the NGX main board, a listing segment for well-established companies with demonstrable records of accomplishments. The listing of Geregu’s shares has added N250 billion to the market capitalization of NGX, further boosting liquidity in the Nigerian capital market and providing opportunities for wealth creation.

The results showed that the company, which was listed at N100 per share and N250 billion in market capitalization closed the day trading at N110 per share and N275 billion in market capitalization, accounting for a growth of 10 per cent.

Further analysis showed that 8.5 million worth of the shares were traded in 70 deals. Despite the listing, the stock market had maintained a bearish profile as the NGX All-Share Index dropped by 0.08 or 43.04 basis points to close at N48.879.74 index points as against 48.836.70 points recorded the previous day trading. The market breadth closed negative with 22 losers led by Cadbury Nigeria Plc losing 9.93 per cent as against 13 gainers led by Geregu Power Plc with a gain of 10 per cent.

Reacting to the development, the Chairman, Geregu Power, Mr. Femi Otedola, stated that the listing of the company was the actualization of a vision to bring world-class standards in governance, sustainability, and business processes to the company and the Nigerian electricity sector.

He added that listing on the Main Board of NGX would ensure that the long-term growth of the company is assured and its benefits would be passed on to its shareholders.

The Chief Executive Officer, of NGX, Mr. Temi Popoola, in a statement obtained from the Exchange said, “Today’s listing is a promising development in the country’s power sector and we are delighted to welcome Geregu Power Plc to the Exchange. Having Geregu listed in our market is proof of NGX’s commitment to building a robust and inclusive market and creating avenues for sustainable investment. This listing will enhance liquidity for Geregu, increase its visibility among global investors, elevate its value and boost transparency, as our marketplace is a sterling platform for raising capital and enabling sustainable growth for national development.”

The Chief Executive Officer, Geregu Power Plc, Akin Akinfemiwa, noted that the capital raise would significantly support the company’s capital investments.

“The resounding success of our debut bond offer demonstrates implicit confidence in our business by the investment community in our quest to increase capacity and contribute our own quota to the Nigerian Electricity Supply Industry (NESI).

“It would help us in the attainment of our long-term corporate goals; market leadership, innovation, and commitment to the highest standards of environmental, social, and corporate governance,” he added.

Some stockbrokers have described the listing by the introduction of Geregu Power Plc on the main board of The Exchange on Wednesday, 5 October 2022 as a good step that will increase the efficiency and capital base of the company.

However, the company, promoted by Mr. Femi Otedola, is drawing caution from market operators considering the fact that Forte Oil, which was earlier sponsored by him failed to meet investors’ expectations as the oil firm has been delisted from the market.