Startup to join NSE’s expensive stock list

Nairobi Securities Exchange will have its third most expensive stock on Thursday, when a company owned by two former executives of investment bank Dyer and Blair goes public.

Investment firm Kurwitu Ventures is set to list by introduction on the Growth and Enterprise Market Segment (GEMS) to raise its profile before returning to the market to raise capital.

The firm will list 100,200 shares, priced at about Sh1,000 each, making it the third most expansive stock at NSE after British American Tobacco Kenya at Sh1,050 and Limuru Tea, currently priced at Sh1,020.

“Our intention is to attract sophisticated investors who understand our business model and the risks very well. That is why we are listing our shares. Thereafter, there will be more opportunities for capital raising,” Kurwitu’s managing director, Mr Abdirahman Abdillahi, said.

Kurwitu is currently valued at Sh105 million, out of which Sh102 million is in freehold land. In 2012, it made a profit of Sh100,000 and had a small capital base of about Sh3 million.

But the directors injected in fresh capital as part of its preparation for listing.

Kurwitu will equally be the third firm to list on the GEMS, but the first targeting largely the Muslim community with a Shariah-compliant investment approach. The firm will be seeking funds to invest in energy, agriculture, real estate and mining.

Emerging opportunities

“Investment plans for these sectors are at the development stage. There are also emerging opportunities in mining, but the issues of risks and returns in the sector are not well understood,” Mr Abdillahi said.

The firm’s focus is on arranging financing for projects through a Shariah-compliant manner that does not advocate charging of interest but sharing of risks and returns with investors.

The scope will be on arranging for financing of projects and partnering with investors on an agreed time-frame to enable them recoup their investment. Their focus will not be limited to raising money for identified projects, but they will not involve themselves in the day-to-day running of the projects with the investors.

In the lead-up to the planned listing on Thursday, November 13, the firm undertook a restructuring of its operations, away from its original focus on provision of investment management services.

It changed its approach to Sharia-compliant investments by focusing on some of the most important sectors of the economy that have potential for high returns.

The brains behind the little-known Kurwitu Ventures include a number of big shots in public service and corporate Kenya.

They include Mr Abdikadir Mohamed, a senior presidential advisor on constitutional and legal affairs and joint chairman of the presidential task force on parastatal reform, Mr Mohammed Hassan, former MD of Dyer and Blair and current chairman of National Bank of Kenya, and Ms Sumayya Athmani, MD of National Oil of Kenya.

Others include Mr Abdulkadir Haji, founder of Radio Salaam, and Mr Abdillahi, former head of corporate finance at Dyer and Blair, and also former MD of Dyer and Blair (Uganda).

Raise profile

While at Dyer and Blair, Mr Hassan, together with Mr Abdillahi, led transaction teams of some of the largest initial public offerings (IPOs) in Kenya, including Safaricom, Kenya-Re and Equity Bank.

The NSE launched GEMS in January 2013 to enable small and medium firms to raise their profile and capital to upscale their operations.

The firms are required to show audited accounts for a year, which need not be profitable.

They also need to show evidence that they have enough working capital for one year to support their business plans.

The minimum share capital requirement is Sh10 million. Kurwitu will be joining Home Afrika and Flame Tree Group in listing on the GEMS.