Kenya’s Capital Markets Authority (CMA) has approved a three‑day extension of the Kes 106.3 billion Initial Public Offering (IPO) for the Kenya Pipeline Company (KPC).
The offer, originally set to close on February 19, 2026, will now remain open until Tuesday, February 24, 2026, at 5 p.m. local time (1400 GMT).
The Privatization Authority said the extension responds to retail investors’ requests for more time to participate, aligning with the government’s objective of expanding domestic share ownership and fostering inclusivity in Kenya’s capital markets.
High Court Dismisses Privatization Petitions
In a parallel development, the High Court of Kenya dismissed consolidated petitions challenging the privatization of KPC. The Consumer Federation of Kenya and Busia Senator Okiya Omtatah had argued that the process was unconstitutional, lacked transparency, and threatened national interests.
The court, however, found that the privatization framework under Sessional Paper No. 2 of 2025 complied with constitutional requirements, including public participation and parliamentary oversight. Judges noted that while public assets attract heightened scrutiny, privatization is permissible when due process and safeguards are in place.
Petitioners failed to demonstrate violations of national security or consumer protection, and each party was ordered to bear its own costs. The ruling effectively gives the government the legal green light to proceed with the transaction.
Valuation Debate: Analysts Split
Even as the IPO window extends, valuation concerns remain sharp. Ugandan institutional analysts have converged on a KSh 4.61 per share fair value, nearly half the IPO price of KSh 9.00.
- Crested Capital projected a 49% downside, using a blended discounted cash flow (DCF) and relative multiples framework.
- Old Mutual Investment Group Uganda arrived at the same valuation, reinforcing scepticism.
- At KSh 9.00, the IPO values KPC at KSh 163.56 billion, implying a 21.8x P/E, 8.1x EV/EBITDA, and a 3.9% dividend yield.
- At the Ugandan fair value, those metrics compress to 11.0x earnings, 5.5x EV/EBITDA, and a 7.6% yield, closer to regional utility benchmarks.
Kenyan analysts have also expressed caution: NCBA Investment Bank priced KPC at KSh 6.35, while Standard Investment Bank implied KSh 5.61 per share.
Despite valuation concerns, KPC remains a strategic monopoly:
- Operates 1,342 km of pipeline and storage infrastructure.
- Controls 91% of Kenya’s petroleum transport market.
- Posts EBITDA margins near 45%.
- Committed to a 50% dividend payout policy after swinging to a KSh 8.5 billion profit in 2025.
Transaction advisors argue that KPC’s regulated cash flows, monopoly economics, and regional strategic value justify a premium.
Investor Timeline
- Applications close: February 24, 2026
- Allocation results: March 4, 2026
- Share crediting & refunds: March 6, 2026
- Listing on NSE: March 9, 2026
The sharp divergence between IPO pricing and analyst valuations sets the stage for a closely watched listing. Final judgement will rest with post‑listing price discovery once trading begins on the Nairobi Securities Exchange.
