Banque du Caire prices $658m IPO at top of range as Egypt pushes asset sales

Banque du Caire has priced its initial public offering at EGP 5.30 per share, the top of its indicative range, in a fully secondary sale by state-owned Banque Misr worth about EGP 36.4 billion ($658 million), according to EnterpriseAM, Ecofin and a Zawya report, with trading on the Egyptian Exchange expected to begin on November 2.

Record demand for the private tranche

The final price, announced on October 26, values the Cairo-based lender at about EGP 80.8 billion, or roughly 1.46billion.InstitutionalinvestorsplacedorderswortharoundEGP205.8billion(3.72 billion) for the private placement, about six times the shares available, according to figures reported by Ecofin and EnterpriseAM. Excluding the anchor investors, the bank said the remainder of the placement was covered about 19.8 times. AGBI also reported orders approaching $4 billion for the private tranche.

The private placement, worth about EGP 34.55 billion ($625 million), is the largest in the history of the Egyptian Exchange, EnterpriseAM reported. Institutions were allotted 95% of the offering and retail investors 5%. The retail book closed on October 28 and the transaction is scheduled to be executed on October 29, with listing under the ticker BQDC subject to regulatory approvals.

Upsized to 45% with EBRD and IFC on board

Egypt’s Financial Regulatory Authority approved an increase in the size of the sale from 30% to 45% of the bank, or about 6.86 billion shares. Banque Misr will keep a 55% stake, and because no new shares are being issued, all proceeds go to the seller rather than to Banque du Caire’s capital.

The European Bank for Reconstruction and Development and the International Finance Corporation each agreed to take up to 15.74% of the enlarged private placement, about $100 million apiece at the offer price, according to EnterpriseAM and the Zawya report, which cited investment bankers. EnterpriseAM noted the two development lenders would together hold roughly 13.5% of the bank. The offering circular also names four cornerstone investors: Helikon, Redwheel, Sustainable Capital and Waha Investments.

Independent financial adviser Baker Tilly set the bank’s fair value at EGP 5.30 per share, meaning the shares were not sold at a discount to that estimate. CI Capital acted as lead global coordinator and EFG Hermes as joint global coordinator. Banque Misr is barred from selling further shares for a year without the bookrunners’ consent.

A test for Egypt’s privatisation drive

The deal is the Egyptian state’s largest asset sale in years and its first IPO of a state-owned company since United Bank in late 2024, EnterpriseAM reported. It comes as the government tries to meet commitments under its International Monetary Fund programme, which expires on December 15. Cairo still needs to raise close to $1 billion to reach a $1.5 billion divestment target, according to EnterpriseAM and Ecofin.

The pricing also held up despite a sharp sell-off on the local bourse. The benchmark EGX30 index lost about 8.4% over three sessions to October 26, its lowest level since early April, prompting the regulator to temporarily ease brokers’ liquid capital requirements, EnterpriseAM reported. The index remained up about 15.8% for the year.

Analysts’ price targets compiled by EnterpriseAM range from EGP 5.05 in a bear case to EGP 7.80, leaving the first days of trading as the next gauge of whether demand from foreign and local institutions carries into the secondary market.