Banque du Caire public offering oversubscribed 27 times
Banque du Caire’s initial public offering drew robust individual investor demand, with the retail tranche ending roughly 27 times oversubscribed as the order book closed Wednesday, according to a statement from the Egyptian Exchange.
Orders placed in the bourse’s special deals market totaled about 9.29 billion shares, easily outpacing earlier market estimates that pointed to a coverage ratio of 15 to 20 times, Bassem Ahmed, head of retail sales at Al Ahly Pharos, told Al Manassa. Recent stock market volatility did not dampen appetite for the state-owned lender's retail offering, he added.
Egypt’s benchmark EGX30 index fell for three consecutive trading sessions, from last Thursday through Monday, under pressure from foreign investor selling. It rebounded on Tuesday before falling again on Wednesday, declining 1.64%.
Banque du Caire’s IPO was delayed because investment institutions submitted bids at low valuations, prompting a decision to offer part of the shares to retail investors on the stock exchange alongside the private placement.
The offering initially targeted the sale of shares representing 30% of the bank’s capital, with 95% allocated to the private placement, which was oversubscribed six times. The remaining shares were reserved for the public offering. The bank later announced that the Cabinet had approved increasing the proportion of capital offered for sale to 45%.
Banque du Caire is Egypt’s third-largest state-owned bank. In 2024, the Central Bank of Egypt sold a stake in United Bank as part of efforts to accelerate the government’s privatization program. The retail tranche of that offering was oversubscribed 59 times, compared with 27 times for Banque du Caire’s current offering.
Ahmed said the higher oversubscription rate for United Bank did not necessarily mean it had been more attractive to investors. The deal was relatively small, at about 4.5 billion Egyptian pounds, making it easier to cover, he explained.
“Banque du Caire represents a large offering for which it is difficult to find a comparable example among recent IPOs,” he added.
Ahmed estimates that Banque du Caire’s offering will raise between 30 billion and 36 billion pounds ($535 million to $642 million). He pointed to its size compared with the IPO of fintech company MNT-Halan earlier this month, which raised about 7.8 billion pounds ($140 million).
Ahmed also ruled out the departure of foreign investors from the market in recent months as the main reason for demand for Banque du Caire’s retail offering. Foreign investors account for a limited share of trading in Egyptian stocks compared with other investors, he said, adding that their interest is more heavily concentrated in government debt instruments.
Demand for Banque du Caire’s offering coincided with continued foreign investor sales of government debt on the secondary market, following a similar pattern in recent sessions, amid mounting concerns about the regional fallout from the US-Iran conflict.
Foreign investors recorded net sales of treasury bills worth 20.6 billion pounds ($368 million) on Wednesday, while the Egyptian pound held steady against the dollar, with the greenback trading at 56.17 pounds, according to the National Bank of Egypt.