₦airaland Forum

$100m

ositadima1:
What’s the minimum entry barrier they are setting for private investors to get an allocation?

Happy Sunday

Please 🙏 was gifted N100,000 as a birthday gift 🎁 what stocks would you recommend I buy.

Thank you in anticipation of your response.

Sunrisepebble:
I think IPO will be $50bn

So IPO will be higher than Private Placement price?

does this valuation include Fertilizer or will that IPO be different?

Sunrisepebble:
But should one be paying for perfect execution ahead of time?

By the way I don’t agree with one of my mentions here that the refinery is overvalued. DR is the most modern and efficient refinery in the world, average age of European refineries are 70+. It’s also not just a local supplier, but a continental one which adds to the premium. I wish I could share financials but from going to the site myself I’ve heard that they’re making something like $1bn in EBITDA every month since the start of the Middle East crisis. Their margins are also far healthier than any refinery out there

I will be participating in the private placement.

This would be for private placement while IPO could be between ₦787.50 - ₦987.50 per share.

handsomebolanle:
Thanks… that’s circa 490.

Good question. I am actually more keen on the fertilizer business. I pray it is listed separately.

deathwing:
does this valuation include Fertilizer or will that IPO be different?

mjblinks:
$100m

Could you share your sources?

deathwing:
does this valuation include Fertilizer or will that IPO be different?

It would be different. This valuation is likely just the refinery and petrochemicals together. The petrochemicals at the moment can make an extra $1.2 Billion revenue for the refinery. If the future detergent factory is linked to the petrochemicals as well then this may become a very diversified business by 2028 - 2030.

Also, it is not clear if the refinery to be built in East Africa would be a branch of the Lekki refinery or a separate business. If it becomes a branch then this valuation could easily hit the $80 Billion mark by 2030 making it the largest firm in Africa (both public and private) ahead of Sontrach of Algeria and the NNPC of Nigeria (who are currently nos 1 & 2 on the continent)

Agbalowomeri:
Are they not raising FRESH capital that will take them to the NEW VALUATION? It's not as if they are just listing shares based on current valuation. It is an IPO

It is called an IPO for a reason, it is probably overpriced.

Ote$

ositadima1:
Could you share your sources?

pluto09:
It is called an IPO for a reason, it is probably overpriced.

The arguments of isaacoca is faulty. The IPO is to open up ADDITIONAL value, not based on the current value of the company. So why would the additional value expected not be added to the valuation? Being overpriced is a different argument altogether

I think so

deathwing:
So IPO will be higher than Private Placement price?

How did you arrive at this please ? At most N600-700 if it’s a $50bn valuation and based off what exchange rate is

mjblinks:
This would be for private placement while IPO could be between ₦787.50 - ₦987.50 per share.

Just the refinery and petrochemical company. Fertilizer is separate

deathwing:
does this valuation include Fertilizer or will that IPO be different?

Sunrisepebble:
Just the refinery and petrochemical company. Fertilizer is separate

Ok, not really interested in the IPO, just Fertilizer. But money go still remain for Africa for Fertilizer IPO to be subbed like this? 😆

The idea of a private or internal placements for Dangote refinery, so called IPO is very much not commendable.This is not an lPO but a process for Institutional investors and billionaires to invest probably at a cheaper rate or discount before being opened to the public.l think that defeats the purpose entirely to what it was initially meant for.Dangote clearly stated that he wants ordinary Nigerians to have stakes in the refinery but it now seems,everything is open first to his billionaire friends.

Agbalowomeri:
The arguments of isaacoca is faulty. The IPO is to open up ADDITIONAL value, not based on the current value of the company. So why would the additional value expected not be added to the valuation? Being overpriced is a different argument altogether

So the standard has now changed because it has to do with alhaji. Why are we not applying such standard for thr like of kpakus, Zichis onado etc.Oga na value way dey ground they suppose use which yeye future valuation.
Who don't know how to place future values to his business How about if the future values don't materialise. This was how banks scammed us in past PO.Whwn you list based on present value plus little goodwill.As you begin to add more value which your financials will be reflecting. The SP will equally begin to move north.
Don't come and sell a bird in the bush to people. Na so they wan do for Dangote food. Whr is the value from the rice till date

Tendd:
The idea of a private or internal placements for Dangote refinery, so called IPO is very much not commendable.This is not an lPO but a process for Institutional investors and billionaires to invest probably at a cheaper rate or discount before being opened to the public.l think that defeats the purpose entirely to what it was initially meant for.

He done sit with his billionaire friends and changed plan to open office on the people. IIf he wants to be fair.He could split it into two at same price. He allocates a percentage to his friends as PP and IPO at same price to Nigeria.
When government begins giving licences for importation he go want make we follow fight for him

Streetinvestor2:
So the standard has now changed because it has to do with alhaji. Why are we not applying such standard for thr like of kpakus, Zichis onado etc.Oga na value way dey ground they suppose use which yeye future valuation.
Who don't know how to place future values to his business How about if the future values don't materialise. This was how banks scammed us in past PO.Whwn you list based on present value plus little goodwill.As you begin to add more value which your financials will be reflecting. The SP will equally begin to move north.
Don't come and sell a bird in the bush to people. Na so they wan do for Dangote food. Whr is the value from the rice till date

What are you saying?

So the recent IPO by banks they did not create ADDITIONAL shares?

Agbalowomeri:
What are you saying?

So the recent IPO by banks they did not create ADDITIONAL shares?

Has your account been hacked. Did the banks do IPO recently or PO
What Dangote is doing is IPO which should capture present value and not future phantom valuation If it is allowed. Then we had no business condemning the likes of kpakus, Zichis and oando too

Agbalowomeri:
What are you saying?

So the recent IPO by banks they did not create ADDITIONAL shares?

Is it not Alhaji that is selling part of his holding in the company to the public?
What additional shares or value are you talking about??

Streetinvestor2:
Has your account been hacked. Did the banks do[b] IPO recently or PO[/b]
What Dangote is doing is IPO which should capture present value and not future phantom valuation If it is allowed. Then we had not business condemning the likes of kpakus, Zichis and oando too

Same argument holds

Dangote is not LISTING shares which is where your argument can hold for present value

They are raising funds for EXPANSION. They will create NEW SHARES. I am wondering why you think the expansion should not be added to the valuation

I just hope people will do their due diligence and not buy because of hype and fomo.

isaacosas01:
Bro this private placement valuation is inflated. When i was hearing valuation of $40B i thought it was a joke. So they are really going to value it at $40b.

This is a circular valuation — you’re paying a future price to fund the future you’re paying for.

$39.1B is a 2028 - 2030 valuation when the refinery is doing 1.4 million bpb, not a 2026 one.
The valuation of the refinery today is $18B to $25B.

You can do the math yourself using the largest refinery in the world - Jamnagar. Dangote is currently priced higher than it at $39.1B which makes no sense.

Lastly for retail investor this is clearly not a growth stock. It’s already priced in future growth.

Returns come from buying below intrinsic value, not from buying a great asset.
Dangote Refinery is a great asset. But a great asset at the wrong price is a bad investment.

Streetinvestor2:
Has your account been hacked. Did the banks do IPO recently or PO
What Dangote is doing is IPO which should capture present value and not future phantom valuation If it is allowed. Then we had not business condemning the likes of kpakus, Zichis and oando too

I think this is a model Dangote has mastered. He will likely recover his initial investment and still retain more than 70% ownership of the business. Lol.

Another factor most people are not considering is that more refineries will enter the market very soon. BUA and several others are already planning and executing projects. They will all compete within the same space, just as Dangote Cement, BUA Cement, and WAPCO are competing today.

pluto09:
Is it not Alhaji that is selling part of his holding in the company to the public?
What additional shares or value are you talking about??

So that means this summary is wrong ba?

Dangote Petroleum Refinery is raising funds primarily to support a massive expansion of its processing capacity from its current 700,000 barrels per day to 1.4 million barrels per day by 2028,

The valuation by the production of 1.4 million barrels per day is supposed to be $50B. That is my own understanding

Agbalowomeri:
So that means this summary is wrong ba?

Dangote Petroleum Refinery is raising funds primarily to support a massive expansion of its processing capacity from its current 700,000 barrels per day to 1.4 million barrels per day by 2028,

The valuation by the production of 1.4 million barrels per day is supposed to be $50B. That is my own understanding

I don't think that summary is correct.
The money from the IPO is going directly to alhaji and not to the company from my own understanding.
I don't think he is going to list because he wants to expand, he is doing it to improve his own worth.

Nigerians HARDLY do due diligence

Shalom428:
I just hope people will do their due diligence and not buy because of hype and fomo.

pluto09:
I don't think that summary is correct.
The money from the IPO is going directly to alhaji and not to the company from my own understanding.
I don't think he is going to list because he wants to expand, he is doing it to improve his own worth.

So the 700,000 barrel per day company was constructed with about $20B. Where is the fund for the expansion to 1.4m barrel per day coming from if we all want the company to retain the valuation of $20B?

What’s the present value of the future $50B valuation? Isn’t that what people should pay now?

Agbalowomeri:
So that means this summary is wrong ba?

Dangote Petroleum Refinery is raising funds primarily to support a massive expansion of its processing capacity from its current 700,000 barrels per day to 1.4 million barrels per day by 2028,

The valuation by the production of 1.4 million barrels per day is supposed to be $50B. That is my own understanding

Agbalowomeri:
So the 700,000 barrel per day company was constructed with about $20B. Where is the fund for the expansion to 1.4m barrel per day coming from if we all want the company to retain the valuation of $20B?

Lol, what he is doing now is an IPO, which means allowing others to acquire partial ownership of the current refinery. It is not the same thing as an expansion.

The refinery, as a separate entity, can source funds for expansion either internally from retained earnings or externally through debt. I don't think we should mix these two.

I think this is the same misconception people had when Dangote Sugar was in trouble. Many assumed that, because it majorly belonged to Dangote, he would simply inject funds from his other businesses to support it. Eventually, the DS had to raise capital through a Public Offer.

ositadima1:
I think this is a model Dangote has mastered. He will likely recover his initial investment and still retain more than 70% ownership of the business. Lol.

Another factor most people are not considering is that more refineries will enter the market very soon. BUA and several others are already planning and executing projects. They will all compete within the same space, just as Dangote Cement, BUA Cement, and WAPCO are competing today.

I don’t think BUA is still building. There is no update on this project.

pluto09:
I don't think that summary is correct.
The money from the IPO is going directly to alhaji and not to the company from my own understanding.
I don't think he is going to list because he wants to expand, he is doing it to improve his own worth.

He is listing because he wants to expand and achieve this by 2028