Chinedu Nwaigene May 1, 2017
Nigerian stock exchange

The Nigerian Stock Exchange (NSE) is a renowned stock exchange that offers more returns on investment that relates to equity and bonds. Most of the nations small and growing business have been allowed to take their company public through an alternative security market. The market also offers dual listing opportunities for foreign and local companies such as when you have listed your company on other stock exchange and wishes to list the same company on Nigerian stock exchange, the NSE caters for your company as well.

Most Nigerian business who wants to raise money for a huge expansion can do so by listing their company on the Nigerian stock exchange which is allegedly the heart of the African markets. To understand how you will list your company, we would first inform you on the three stages of how you can be able to go for the IPO in the Nigerian stock exchange

3 Stages of Listing Your Company in Nigerian Stock Exchange

 

 

1. Premium Board

This is the highest section for most big companies that would meet the rigorous standards and have a great corporate governance. It is mostly for companies who are part of the industry leaders such as if your company if one of the leaders in the manufacturing, financial, retail, etc industries, then this board is meant for you. The premium board which rates as the best and most promising companies to return on investment attracts more investors both local and foreign because of its high standard of capitalization and liquidity. To see the listing rules for this board, you may wish to read it up here. Premium Board Listing Rules-http://www.nse.com.ng/regulation-site/IssuersRules/Rules%20for%20Listing%20on%20the%20Premium%20Board.pdf

2. Main Board

This board of the Nigerian Stock Exchange gives firms from different categories of industry the opportunity to get financed from the public as well. However, to be admitted to this board, you will need to meet a certain criterion which includes market capitalization of your firm, profitability, along with internal regulations and high corporate governance. This board is where most of the financial services, consumer goods, and industrial goods are listed.

3. Alternative Securities Market (AseM)

This board focuses more on the emerging business that has good growth potentials. It also gives the company the ability to raise capital from the market at low cost while allowing them to grow substantially. It portrays no limit of the amount of capital a company can raise as long as the firm meets its regulatory requirements. Companies listed in this section of the Nigerian Stock exchange are supported by their followings;

  • Designated advisers
  • Growth Ambassadors
  • NSE Institutional Services

To list your company in the Nigerian Stock Exchange contact listingsales@nse.com.ng

Listing Requirements

To list your company in any of the three boards designated by the Nigerian stock exchange, there are some requirements you will need to meet up with such as the [re tax profits, the market cap, operating record, financials, public shareholders etc. To see the full requirements for all three boards, go here.

 

Benefits of Listing Your Company in Nigerian Stock Exchange

As Nigerian market is growing and one of the best in the African continents, listing your company on the Nigerian Stock exchange comes with varieties of benefits and opportunities which are listed below;

  1. Access To Long Term Capital
  2. Attract Local And Foreign Investors
  3. Good Standard of Trading Environment
  4. To Build Sustainable Organization
  5. Access to Advising Programs For Companies
  6. Brand Equity And visibility
  7. Opportunity For Investors To Realize their Investments
  8. Creates a market valuation for your business
  9. Improves supplier, investor and customer confidence
  10. Better Corporate Practice
  11. Companies have additional leverage when obtaining loans from financial institutions Stock and stock options programs can be offered to potential employees, making the company attractive to top talent
  12. Improve the quality of information available for decision-making

 

Ways Of Listing Your Company in the NSE

The basic way to list your company on the Nigerian stock exchange is to float an Initial Public Offering (IPO) whereby the public can buy your shares in the market and you can obtain this through two main processes as follows;

  • Offer For subscription: This is the situation where you release the unissued portion of your authorized share capital for purchase by the public. The capital which is raised here f=goes into the account of the company
  • Offer For Sale: In this category, you offer the already issued and paid-up shares of the company to the public by the current shareholders of the firm. Initial shareholders and promoters often explore this opportunity as a way of selling off their investments.

The total Number of Shares which are released in the course of this two main offering will be listed on the NSE.
NOTE: The organization may likewise consider listing by introduction, a procedure whereby the shares of an organization are recorded on an exchange without an earlier IPO. Be that as it may, such an organization, for the most part, would have raised capital preceding applying to show; it additionally should meet the listing requirements, including a base number of open shareholders and other requirements.

Listing Process

To list your company in theNigerian Stock exchange, there are some processes which your firm is meant to undergo. These processes serve as guides to companies and vary from company to company. The steps are;

Consultation and Discussion
Decision Making and Mandate
Documentation and Packaging
NSE quotation approval and SEC registration
Completion board meeting
Distribution and marketing
Range analysis and allotment
General Undertaking stage and Declaration of Compliance
Listing and facts behind the listing

 

Industries and Sectors Available To List Firm on NSE

1. Agriculture

This sector covers, basically, the creation of crops, plants, vines, or trees (barring ranger service operations); and the continuing, grazing or feeding of livestock for the offer of livestock or livestock products (counting serums) for livestock increase, or for esteem increase. Fishing, chasing and catching spreads units mostly occupied with other commercial fishing.

Sub-sectors of Agriculture are;
– Crop Production
– Fishing/Hunting
– Livestock/Animal Specialities

 

2. Construction/Real Estate

As stated in the NSE website; This sector includes companies mainly engaged in the construction of buildings which include the construction of a house, farm, industrial, commercial or other building structures, and carrying out alterations, additions, and renovation or general repairs to these buildings. Establishments primarily engaged in the construction of buildings for sale, such as developers, are included, as are companies that are mainly involved in renting or leasing real estate to others; managing real estate for others; selling, buying or renting real estate for others; and providing other real estate related services, including appraisal services.

The Subsector for this sector includes,
– Building Construction
– Non-Building/Heavy Construction
– Property Management
– Real Estate Development
– Real Estate Investment Trusts(REITs)
– Building Structure/Completion
– Site Preparation Services

3. Consumer Goods

This area contains organizations that are occupied with the production and manufacturing of conclusive goods. When all is said in done, these are items and administrations arranged for personal use, particularly proposed for the mass market. This significant segment envelopes goods that are devoured instead of used in the production of different goods, and incorporate both strong and non-sturdy consumables. Incorporated into this segment are makers of automobiles/auto parts, household solid great, materials and clothing, and in addition makers’ sustenance, beverages, and tobacco items.

Subsectors of this sector includes;
– Automobiles/Auto Parts
– Beverages–Brewers/Distillers
– Beverages–Non-Alcoholic
– Consumer Electronics
– Food Products
– Food Products–Diversified
– Household Durables
– Personal/Household Products
– Textiles/Apparel
– Tobacco Products
– Toys and Games

4. Financial Services

This area incorporates organizations that are occupied with the arrangement of financial administrations, in investing money in transcendently financial resources, in giving administrations to lenders, borrowers, and investors, and in giving insurance scope of numerous kinds.

Sub-sectors Includes;
– Banking
– Insurance Carriers, Brokers, and Services
– Mortgage Carriers, Brokers, and Services
– Non-Depository Credit Institutions
– Other Financial Institutions

 

5. Healthcare

The healthcare sector consists of companies that provide healthcare services. Also, healthcare involves in R&D of Pharmaceutical products.

Sub-sectors includes;
– Healthcare Providers
– Medical Equipment
– Medical Supplies
– Pharmaceuticals

 

6. Industrial Goods

It Consists of companies that are involved in the manufacture and distribution of capital goods, including aerospace and defense, engineering and building products, electrical equipment, industrial machinery, and packaging products for industrial and consumer products.

Subsectors Includes;

  • Building Materials
  • Electronic and Electrical Products
  • Packaging/Containers
  • Tools and Machinery

7. Information & Communications Technology

ICT consists of all technical means used to handle information and aid communication.

Sub-sectors Includes;
– Computers and Peripherals
– Computer Based Systems
– Computer Software
– Diversified Communication Services
– Electronic Office Equipment
– Internet Service Providers
– IT Services
– Processing Systems
– Scientific and Technical Instruments
– Semiconductors
– Telecommunications Carriers
– Telecommunications Equipment
– Telecommunications Services
– Other ICT Products and Services

8. Natural Resources

It consists of firms that are involved in a wide range of commodity-related manufacturing industries Such as Chemicals, glass, paper and forest products.

Sub-sector includes;

  • Chemicals
  • Metals
  • Precious Metals
  • Precious Stones
  • Paper/Forest Products
  • Non-Metallic Mineral Mining
  • Mining Services

 9. Oil & Gas

This sector includes all companies engaged in operating and/or developing oil and gas field properties, and companies primarily engaged in recovering and producing liquid hydrocarbons from oil and gas field gases.
Sub-Sectors Includes;
– Coal Extraction
– Coal and Coal Products Distributors
– Crude Oil and Natural Gas Extraction
– Petroleum Refining
– Petroleum and Petroleum Products Distributors
– Petroleum Bulk Stations and Terminals
– Gasoline Stations
– Energy Equipment and Services
– Field Services
– Integrated Oil and Gas Services

10. Services

This sector includes companies that are primarily engaged in providing a wide variety of services for individuals, business and government establishments, and other organizations. These services encompass commercial services and supplies, as well as transportation services.

Subsectors Includes;
– Advertising Agencies
– Employment Solutions
– Printing/Publishing
– Waste Management
– Airlines
– Courier/Freight/Delivery
– Rail Transportation
– Road Transportation
– Water Transportation
– Storage/Warehousing
– Transport-Related Services
– Hospitality
– Hotels/Lodging
– Education/Training
– Media/Entertainment
– Repair/Maintenance
– Travel and Tourism
– Miscellaneous Services
– Apparel Retailers
– Automobile/Auto Part Retailers
– Electronics/Appliances Retailers
– Food/Drug Retailers and Wholesalers
– Specialty Retailers

11. Utilities

This sector comprises establishments engaged in the provision of the following utility services: electric power, steam supply, and water supply.

Subsectors Includes;
– Electric Power Generation
– Electric Power Transmission
– Electric Power Distribution
– Water Treatment and Distribution

 

12. Conglomerates

This sector comprises companies that incorporate engineering and production to manufacture a varied group of products
Listing your companies on the Nigerian stock exchange comes with huge benefits and few cons too but before choosing whether or not to list your company, you must assess the greater part of the potential points of interest and hindrances that will emerge.

This typically will occur amid the guaranteeing process as the company works with an investment bank to measure the upsides and downsides of a public offering and decide whether it is to the greatest advantage of the organization.


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