Kampala, Nov 7 (IANS): Indian billionaire Sunil Mittal’s Airtel Uganda Ltd. failed to sell about half of the shares on offer in its initial public offering (IPO), as investors stayed away, preferring high-yield government bonds, a media report said.

Airtel said it managed to raise 211.4 billion shillings ($56 million) after selling 54.5 per cent of the 8 billion shares on offer. Retail investors bought just 0.3 per cent of the IPO. Shares were unchanged at 100 shillings on its debut on Tuesday, Bloomberg reported.

Government bonds in the East African country yield as much as 15 per cent. By comparison, shares of Airtel’s rival MTN Uganda Ltd. have dropped 14 per cent since its IPO in 2021. Investors have also been wary after Uganda enacted a draconian anti-LGBTQ law, prompting US President Joe Biden to withdraw the nation’s preferential trade access.

Investors may have opted for less risky government securities while disregarding the future value of the stock, the Uganda Security Exchange’s Chief Executive Officer, Paul Bwiso, said in the nation’s capital, Kampala, Bloomberg reported.

The demand for Ugandan government bonds maturing in 2033 exceeded the amount on sale by eight-fold in an auction last Thursday.

Four years ago, President Yoweri Museveni’s government had ordered wireless companies to sell 20 per cent stakes to local investors in a bid to deepen the market.

The state-controlled National Social Security Fund bought a 10.55 per cent stake, according to Airtel, Bloomberg reported.

A decision by the company to spin off its mobile-money business also played a role in the IPO’s failure, according to Centenary Bank financial markets head, Benoni Okwenje.

African telecom operators have been devising plans to capitalise on their lucrative mobile money businesses. TPG invested in Airtel’s unit valuing it at $2.65 billion in 2021, and more recently, MTN sold a minority stake of its fintech business to Mastercard valuing the business at $5.2 billion, Bloomberg reported.