Tuskys IPO delays amid key investor search

PHOTO| Nairobi Stocks Review

Tuskys’s initial public offering (IPO) has been a much-anticipated event that has apparently delayed to arrive. At one point, Tuskys IPO was expected to come in mid-2016. But that passed without anything happening. Then Tuskys’s management last year hinted that retailer would hold its IPO in 2019, but that isn’t going to happen either.

So when should you expect Tuskys to go public? The latest hints suggest Tuskys is targeting 2020, maybe September or the last months of the year, for public listing of its shares.If you think that Tuskys IPO in 2020 would be too late, it isn’t. In 2015, Tuskys unveiled a five-year strategic plan that included preparation for an IPO. In that plan, Tuskys prioritized strengthening its business and suggested that public listing of its shares may come toward the tail end of its five-year plan. If that is so, then Tuskys is within its target if it plans to list in 2020.

Tuskys joins Ibuka programme to prepare for IPO
Tuskys has enrolled into Nairobi Security Exchange’s Ibuka programme. Through Ibuka, the NSE prepares companies that plan to sell their shares to the public. More than a dozen companies have joined the Ibuka programme.

Search for strategic investor
Tuskys is looking for a strategic investor that will inject more cash into the business and guide its expansion plan. An IPO can allow a company to raise more money to spend toward growing its business. But Tuskys wants to avoid the perception that its IPO plan is only about raising more money. That is why the retailer wants to address its cash requirements and clearly outline its roadmap well before it embarks on the IPO path.

Currently, Tuskys is focused on widening its footprint by opening more supermarkets both directly and through franchise arrangements. The retailer currently operates 65 supermarket outlets in Kenya and Uganda and it wants to open more locations. Tuskys CEO Dan Githua has said there is room for the retailer to triple its supermarket footprint in Kenya. Tuskys partnered with Vivo Energy to allow it open supermarket outlets at Shell petrol stations so motorists can shop conveniently as they refill their tanks.

Tuskys has also been opening new supermarket outlets at strategic spots previously occupied by its struggling rivals Uchumi (UCHM) and Nakumatt. At the same time, the retailer is building out its online presence to cater to the growing number of online shoppers. Tuskys recently launched an online marketplace where third-party merchants can also list their products.

Strengthening the executive team
In addition to opening more supermarkets and building its e-commerce business, Tuskys is also strengthen its management team as it prepares for IPO. Early this month, Tuskys announced the addition of two high-profile talents to its executive.