Ugandan institutional analysts have converged on a KSh 4.61 per share valuation for Kenya Pipeline Company, sharpening cross-border scepticism as the KSh 9.00 IPO opens to investors on the Nairobi Securities Exchange.
- •In a research note dated 13 February 2026, Crested Capital became the latest Ugandan firm to price KPC well below the offer, estimating fair value at KSh 4.61 and flagging a 49% downside to the IPO price.
- •The call mirrors a January initiation note by Old Mutual Investment Group Uganda, which arrived at the same valuation using a blended discounted cash flow and relative multiples framework.
- •Uganda accounts for over 30% of KPC’s throughput and revenue, with more than 90% of its fuel imports transiting through the Kenyan pipeline system.
At KSh 9.00, the IPO values KPC at KSh 163.56 billion and implies a 21.8x price-to-earnings multiple, 8.1x EV/EBITDA, and a 3.9% dividend yield. At the Ugandan analysts’ fair value, those metrics compress to roughly 11.0x earnings, 5.5x EV/EBITDA, and a 7.6% yield, levels closer to regional utility benchmarks.
The backbone of the Ugandan valuation is a Discounted Cash Flow (DCF) model, which estimates what KPC is worth today based on the cash it is expected to generate in the future. Crested projects KPC’s operating cash flows through 2030, explicitly factoring in the company’s planned KSh 110 billion capital expenditure programme, which will fund pipeline expansion and storage infrastructure.
Those future cash flows are then discounted back to today using a 16.04% weighted average cost of capital, reflecting Kenya’s sovereign risk, sector risk, and execution risk tied to the heavy capex phase. A 3.0% terminal growth rate is applied to represent long-term, economy-like growth once expansion stabilises. On this basis, the DCF produces an equity value of KSh 4.26 per share, before liquidity adjustments.
To avoid over-reliance on a single model, Crested overlays a relative valuation that benchmarks KPC against listed regional utilities and energy infrastructure firms, including KenGen, Umeme, and oil and gas operators. Applying a target P/E of 11.0x to a projected KSh 0.41 earnings per share yields a comparative value of KSh 5.27.
The two approaches are weighted 60% to DCF and 40% to relative valuation, then adjusted by a 1.2% liquidity discount to reflect expected volatility after listing. The result is a blended fair value of KSh 4.61 per share.
Both Ugandan firms stress that the concern is price, not the asset. KPC controls 91% of Kenya’s petroleum transport market, operates a 1,342-kilometre pipeline network, posts average EBITDA margins near 45%, and has committed to a 50% dividend payout policy after swinging from losses in 2021 to a KSh 8.5 billion profit in 2025.
Yield remains the sticking point. At the offer price, KPC’s 3.9% dividend yield compares poorly with leading Uganda Securities Exchange stocks such as Airtel Uganda (9.5%), Stanbic Uganda (8.2%), and MTN Uganda (7.0%), reinforcing the view that the IPO is priced for long-term infrastructure growth rather than near-term income.
Several Kenyan analysts have also priced the shares below the offer. NCBA Investment Bank estimated fair value at about KSh 6.35, while Standard Investment Bank’s pre-offer work implied roughly KSh 5.61 per share from a KSh 102 billion equity valuation.
By contrast, the transaction advisors and sponsoring brokers argue that KPC’s regulated cash flows, monopoly economics, and regional strategic value justify a premium. The offer closes on 19 February, with listing scheduled for 9 March, leaving final judgement to post-listing price discovery.
