Kenya Pipeline Company has set its IPO price at KSh 9.00 per share, valuing the State-owned fuel transporter at about KSh 163.6 billion ahead of its planned listing on the Nairobi Securities Exchange in March.
- •The pricing implies an enterprise value of roughly KSh 150.6 billion, based on an EV/EBITDA multiple of 8.1x applied to FY2025 earnings, according to the Information Memorandum.
- • The government is selling a 65% stake, with gross proceeds of about KSh 106.3 billion flowing to the National Treasury.
- •The offer involves the sale of 11.81 billion shares from the government’s holding, out of a total 18.17 billion shares that will be outstanding after the IPO.
At the offer price, Kenya Pipeline Company will list with one of the largest market capitalizations on the NSE, reflecting its position as the country’s sole operator of the refined petroleum pipeline network and a consistently profitable State-owned enterprise.
The Information Memorandum shows the IPO price was derived using an earnings-based valuation framework, with EV/EBITDA identified as the primary pricing metric. Kenya Pipeline reported EBITDA of KSh 18.59 billion for the year ended June 30, 2025. Applying the implied multiple of 8.1x yields an enterprise value of about KSh 150.6 billion. The company states that asset-based and income-based valuation approaches were used as cross-checks for reasonableness but did not drive pricing.
The gap between enterprise value and the implied equity valuation reflects Kenya Pipeline’s balance sheet position. The company reports low leverage and strong cash generation, resulting in enterprise value sitting below market capitalization.
On an equity basis, the IPO pricing translates to a price-to-earnings multiple of about 21.8x, based on FY2025 post-split earnings per share of KSh 0.4122. Kenya Pipeline reported a net profit of KSh 7.49 billion for the year, supported by revenues of KSh 38.6 billion. Earnings are underpinned by regulated pipeline tariffs and long-term demand for petroleum transportation and storage, which the company describes as providing predictable cash flows.
Dividend payments form a central part of the investment case. For the year ended June 2025, Kenya Pipeline paid dividends of KSh 5.9 billion, equivalent to a post-split dividend per share of KSh 0.347. At the IPO price, this implies a dividend yield of about 3.9 percent. The board states that dividend decisions consider profitability, cash availability, debt covenants, capital expenditure requirements, and retained earnings, with payouts capped by distributable reserves.
The transaction is structured as a pure offer for sale, meaning no new shares will be issued and Kenya Pipeline will not receive any proceeds from the IPO. All funds raised will accrue to the government and form part of the approved FY2025/26 financing plan. Following the sale, the National Treasury will retain a 35 percent stake, subject to a 24-month lock-in period during which the holding cannot be sold or diluted.
The Information Memorandum does not provide forward earnings guidance, with the valuation anchored on reported FY2025 results. Trading of Kenya Pipeline shares is scheduled to begin on March 9, 2026, subject to regulatory approvals and completion of the offer process. Upon listing, the company will exit the State Corporations Act framework and operate as a publicly listed entity subject to Capital Markets Authority and NSE disclosure rules
