The Nigerian Exchange (NGX) is considering launching a private issuance market that allows non-listed companies to raise capital and conduct other transactions through the Exchange’s platform.
Chief Executive Officer, Nigerian Exchange (NGX), Mr. Temi Popoola, said the Exchange has started discussions with the Securities and Exchange Commission (SEC) on the launch of private markets to enable the Exchange do business with non-listed companies.
According to him, most emerging sectors such as the fintechs and other startups have shown preference for private capital.
He pointed out that the demand for private capital outweighs public capital, thus the consideration of a private market for non-listed companies like startups.
The private market initiative is part of NGX’s efforts to access the vast growth potential in Nigeria’s tech startups and other companies, most of which prefer private capital investments.
Tech start-ups in Nigeria and other parts of the African continent had raised over $1.3 billion in first quarter of the year. One of them, Shuttlers, Nigeria’s leading tech-enabled, scheduled mass transit company, raised an additional $4 million in equity funding to accelerate the growth of its transportation solution.
Shuttlers has raised a combined $5.6 million. Shuttlers has achieved remarkable traction, growing its fleet by 150 per cent and expanding its routes by 25 times, with a 280 per cent increase in passengers moved daily. The company has already built a loyal customer base in Lagos and is rapidly expanding its services to other cities in Nigeria.
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The NGX had set up a digital and technology products advisory panel as part of efforts to advance its digital transformation agenda.
The panel provides a forum for the Exchange to interact with the capital market community and the fintech ecosystem to enhance and increase NGX’s digital product offerings.
SEC had approved the rules for listing on the NGX Technology Board last December, to encourage investments in indigenous technologically inclined companies within Nigeria and across Africa by providing greater visibility to these companies.
NGX also plans to launch Non-Depository Receipts (NDR) to part of innovations to deepen the Nigerian capital market.
The NDR is expected to grant the public access to financial instruments listed on an offshore exchange and provide investors with access to alternate investment schemes.
Under the arrangements, asset managers will sponsor the instrument offshore, convert the receipts and sell off in the market.