Business/Startup thread by @PesaWall

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We have gone through the 149-page Kenya Pipeline IPO prospectus.

Here is a summary of what you need to know about the Kenya Pipeline IPO.

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The gov't is offering around 11.8B shares of the 18.2B issued shares (representing 65% of Kenya Pipeline ownership) at Sh9 per share.

Some numbers shared from the most recent FY:
—Earnings per share: Sh0.41
—Dividend per share: Sh0.35

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The dividend number is particularly interesting because the prospectus says the company has committed to paying 50% of net earnings as dividends going forward.

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The gov't intends to allocate the shares offered in the IPO to the following investor pools:

—Kenyan investors: 45%
—EAC investors: 20%
—OMC companies: 15%
—Foreign investors: 20%

If it plays out like this, the gov't will remain the largest single shareholder with 35%.

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There are two ways to apply for the offer:

—USSD: by dialing *483*816#
—Online: through kpcipo.e-offer.app

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As communicated earlier, the gov't is intending to raise Sh106.3B from this sale and the funds will be deployed to fund infrastructure projects.

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Let's breakdown the business of Kenya Pipeline:

The company is mostly involved in the transportation, storage and handling of refined petroleum products.

Kenya Pipeline generated Sh38.6B or 95% of total revenue from this activity for the year ended June 30, 2025.

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Kenya Pipeline says it plans to diversify away the reliance on petroleum business by reducing its revenue contribution from 95% to 81% in the next four years.

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Kenya Pipeline also operates a fibre optic business.
The business generated revenue of about Sh350m as June 30, 2025.

The company says it plans to grow this business to offer LIT fibre optic products, with ongoing projects to be commissioned early this year.

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Kenya Pipeline enjoys monopoly status in distribution of refined petroleum products enjoying 91% of the market share.

The company only faces competition from trucking by road/rail.

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Here is how the company breaks down its competitive strengths:

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One of the biggest risks the company faces is regulatory risk.

The tariffs it charges are regulated by EPRA and as we have seen previously with Kenya Power, these can be influenced by politics.

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Another big risk the company faces is the shift to electric vehicles:

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The East Africa Crude Oil Pipeline, currently in construction in Tanzania, presents another potential headache for the company in future.

Kenya Pipeline is betting on refined oil products remaining imported products in the region for the foreseeable future.

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There some interesting articles in the articles of association which points to the gov't still trying to maintain control of the decision making in the company.

CST - Cabinet Secretary Treasury( just read Gov't)

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So long as the Gov't holds 10% of Kenya pipeline, it will be entitled to appoint one-third of the Directors.

OMCs and Institutional investors will be entitled to one seat each if they meet the the thresholds prescribed.

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Kenya Pipeline is facing a case with a potential liability of around Sh2.6B.

The company lost the case at the High Court and appealed at Court of Appeal.

As we have seen previously with Stanchart, the outcome of such cases can materially affect the share price in future.

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Now on to Kenya pipeline numbers:

Let's start with the latest.

The company reported a net profit of Sh3.62B for the first quarter ended September 30, 2025.

—Revenue: +9.6% to 10.4B
—Net profit: +15.9% to 3.62B

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Here is how the company has performed over the last 5 years.

Note: The EPS numbers are before the shares were split.

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Statement of financial position:

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Statement of cash flows:

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Income statement projections for the next five years:

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Here is the cash flow projection, interestingly projecting dividends to be paid:

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At the price of Sh9 per share, there are better alternatives like Kengen with better returns at this point in time.

Not investment advise.

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We have gone through the 149-page Kenya Pipeline IPO prospectus....

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