Wednesday, June 23, 2021

Choppies mulls secondary listing on JSE

The Choppies Group, the local market’s leading mass grocery retailer, has confirmed that it is working on a secondary listing at the Johannesburg Stock Exchange (JSE) as the retailer expands in the region.

In an interview, Choppies Chief Executive Officer (CEO) Ram Ottappath said that a secondary listing on the JSE will expose the group to a new universe of South African, regional and international investors whose investment mandate is limited to JSE-listed shares.  

He added that a secondary listing is likely to have liquidity benefits, and it will also be easier for them to raise capital for expansion.

“A secondary JSE listing will raise the visibility of Choppies in the region. We are currently expanding our footprint in South Africa and Zimbabwe, and a JSE listing will give us the option to raise new capital for our expansion programme, both in these markets and into new markets,” said Ottappath.

“We are in the early stages of considering our options. We are not on any fixed timeline and will only pursue this option when the time is right,” he stated.

He is optimistic that the JSE listing would be a positive development for all shareholders adding that the increased exposure will raise the profile of Choppies in the international investment community and could increase demand for their shares. “This will also help us to bench mark ourselves to the best in industry that are listed in JSE.”

“The reception from the Botswana Stock Exchange listing, and from Batswana investors, was overwhelmingly positive. We will retain our primary listing on the BSE and we are proud to be a Botswana company,” said Ottappath.

The Choppies CEO is of the view that through the JSE listing, the profile of the company will automatically change for the best as there are more opportunities for the company and for the group.

The market leading mass grocery retailer listed on the Botswana Stock Exchange (BSE) January 2012 after it received BSE approval to float 1.2 billion shares on the domestic main board.?A close look into the retail group’s performance in the local capital market shows that its share price increased by a massive6 4 percent from P2.05 per share in 2012 to P3.36 in 2013.

Choppies’ market capitalisation reached P3.9 billion at the end of 2013 and the group also paid a dividend of 3.67 thebe per share in 2012. The Botswana retail giant’s profitability increased by 18.4 percent between 2012 and 2013 while revenue increased by 22.01 percent.

Standard Chartered Bank is said to own 12.8 percent of Choppies Enterprises. In his comment Head of Private Equity Africa Standard Chartered Bank Peter Baird said, “companies may consider a listing or secondary listing as a means of accessing greater investor diversity or to fund further expansion.”

He also pointed out that through strategic private equity investment, Standard Chartered aims to support the growth of companies that demonstrate strong expansion potential, ultimately delivering tangible benefits to all stakeholders.

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