Old Mutual Investment Group Uganda has become the latest analyst to challenge Kenya Pipeline Company’s KSh 9.00 IPO price, intensifying a valuation debate that has split independent research houses from the deal’s sponsoring firms.
- •In a January 2026 initiation note released after the offer opened, Old Mutual values KPC at KSh 4.61 per share, implying a 49% downside to the IPO price.
- •At KSh 9.00, the offer values KPC at KSh 163.56 billion, while Old Mutual’s intrinsic valuation points to an equity value of KSh 77.4 billion.
- •Old Mutual’s view reinforces earlier local analyst assessments that also priced the shares below the offer using earnings, yield and peer-multiple analysis.
Old Mutual recommends entry only after a post-listing correction, arguing that current pricing embeds a premium likely to limit near-term upside.
Old Mutual’s valuation is based on a blended framework. Its Discounted Cash Flow model, using a 16.04% weighted average cost of capital and a 3.0% terminal growth rate, yields a value of KSh 4.26 per share. A second leg applies relative valuation, benchmarking KPC against regional utilities such as KenGen and Kenya Power, alongside oil and gas and midstream operators including Seplat and Aradel. That comparison produces KSh 5.27 per share. Weighting the two methods results in the KSh 4.61 fair value, with an accumulation band of roughly one shilling either side.
The Ugandan fund manager separates price from quality. It describes KPC as a regulated national infrastructure monopoly with a 91% market share, average EBITDA margins of about 45%, a net-cash balance sheet, and a stated 50% dividend payout policy. KPC operates a 1,342-kilometre pipeline network linking the Port of Mombasa to Nairobi and inland markets, serving regional demand across Uganda, Rwanda, South Sudan and northern Tanzania.
NCBA Investment Bank placed fair value at about KSh 6.35 per share, arguing the IPO implies a premium earnings multiple for a mature, regulated utility. Standard Investment Bank, in pre-offer valuation work, estimated KPC’s equity value at around KSh 102 billion, implying roughly KSh 5.61 per share on the post-IPO share base.
Other independent analyses have produced broader fair-value ranges of KSh 3.28 to KSh 5.41, citing stretched valuation multiples and a dividend yield that struggles to compete with double-digit, tax-free government infrastructure bonds.
| Source | Type | Price / Fair Value (KSh per share) | Basis |
|---|---|---|---|
| Government of Kenya / IPO Offer | Offer price | 9.00 | IPO pricing |
| Faida Investment Bank | Sponsoring advisor | 9.00 | EV/EBITDA framework |
| Dyer & Blair Investment Bank | Sponsoring broker | 9.00 | Infrastructure valuation |
| Pergamon Investment Bank | Broker research | 9.00 | Offer support |
| Old Mutual Investment Group Uganda | Independent analyst | 4.61 | Blended DCF and peers |
| NCBA Investment Bank | Independent analyst | 6.35 | Relative valuation |
| Standard Investment Bank | Independent analyst | 5.61 | Implied from KSh 102Bn equity value |
| Independent market analysis | Independent | 3.28 – 5.41 | Peers, yield, multiples |
Uganda’s economic exposure adds another layer to the debate. The country accounts for over 30% of KPC’s throughput and revenue, with more than 90% of Uganda’s fuel imports transiting through Kenya’s pipeline system.
That dependence has taken on a policy dimension. At a regional event in late 2025, President William Ruto said Uganda would be invited to acquire a stake in KPC as part of deeper regional integration. The Information Memorandum further states that up to 20% of the 65% stake being divested has been set aside for East African Community governments, should Uganda or other member states opt to participate.
By contrast, the transaction advisors and sponsoring brokers continue to defend the KSh 9.00 price, arguing that KPC’s regulated cash flows, dominant market position and infrastructure-style earnings justify a premium valuation. At that level, the sale of 65% of the company raises about KSh 106.3 billion for the Treasury, leaving the final judgement on valuation to post-listing price discovery.
