Rewane: Dangote Refinery IPO to Boost NGX Capitalization to N236 trillion

Dike Onwuamaeze

The Managing Director of Financial Derivatives Company (FDC), Bismarck Rewane, estimates that the Dangote Refinery’s Initial Purchase Offer (IPO) could raise the NGX market capitalisation by 30 to 40 percent, from N161 trillion to N236 trillion.

Rewane made the forecast during the June edition of the LBS Breakfast Session.

He said, “In a ‘pure addition’ scenario the NGX would rise from N161 trillion to N236 trillion at listing, and the All Share Index (ASI) would re‑rate proportionately.”

His projection assumes that fresh capital will flow in through the subscription, with no rotation out of existing stocks, and that the Dangote Refinery will be listed at the upper end of its valuation range of $50 billion, corresponding to a targeted valuation between N60 trillion and N75 trillion.

Rewane cautioned that the IPO’s immediate effect may be a dip in the ASI, as the United States–Iran conflict‑induced inflation has tightened retail wallets, which make up 35 percent of NGX investors.

He added, “We believe part of the IPO will be funded by trimming liquid blue‑chips, making the net capital gain smaller than expected.”

“In reality, the NGX would not jump from N161 trillion to N236 trillion at listing, and neither would the ASI. It would first fall under sell‑off pressures before gaining on the back of the Refinery IPO’s $50 billion.”

Rewane noted that the listing’s impact is not a simple one‑plus‑one‑equals‑two equation, because many investors are selling some stocks to buy the future. “You know what they say—buy on the rumour and sell on the news.”

He also compared the Dangote Refinery IPO to what he called the “world’s richest men and the IPO craze.”

“That is why the craze of IPOs, from SpaceX, now valued in excess of $1.8 trillion, is going to make Elon Musk the world’s first trillionaire.”

“This makes for interesting analysis by economists who have seen income inequality reaching astronomical proportions.”

“The second‑richest man of explainable wealth is Larry Page, who is worth $257 billion.”

“The second IPO by Sam Altman of OpenAI is valued at $852 billion while Anthropic, the defense contractor IPO, is valued at $1 trillion.”

“These three IPOs totalled $3.65 trillion compared with U.S. GDP of $30.76 trillion and per capita income of $89,991,” he said.

Rewane said that back home in Nigeria, African richest man Alhaji Aliko Dangote is also involved in an IPO and “there is a frenzy about the Dangote Refinery IPO, with an estimated valuation of $50 billion.”

“The anticipated listing of Dangote Refinery is on the lips of institutional and retail investors, as the best thing since sliced bread.”

“From a macroeconomic perspective, the refinery is increasing Nigeria’s export revenues as a major value‑adding component of Nigeria’s net exports.”

“We look at it from the prism of making up for falling oil prices to $85 pb in July from a high of $115 pb last month.”

Rewane also noted that the Dangote Refinery has boosted its jet fuel supply and export by expanding Jet A1 exports beyond the United Kingdom to the Netherlands, France, Spain, Italy and Morocco.

He said that Dangote produces about 24 million litres of Jet A1 per day and has increased jet fuel exports by 770 percent, from roughly 18,000 bpd in April 2024 to about 158,000 bpd by April 2026.

“The refinery cut the domestic price of Jet A1 aviation fuel from N1,750 to N1,650 per litre in May 2026.”

“The refinery also introduced a 30‑day interest‑free credit facility and shifted Jet A1 pricing to a naira‑based model.”

“This supports local airline fuel procurement and strengthens Nigeria’s non‑crude oil export earnings,” he said.

Rewane stated that before the refinery commenced operations, Nigeria was spending $20 billion to $25 billion per year between 2002 and 2022 on fuel import dependency amid artificial scarcity, rent‑seeking and under‑utilised local capacity.

But after starting operation, the refinery reduced fuel imports and FX savings, reaching around 75 million litres per day and enabling “Nigeria to become less vulnerable to global shocks and artificial scarcity created by importers.”