Kenya Pipeline Company’s 65% Stake Sale Ends IPO Drought

• Kenya’s biggest IPO in over a decade puts investor confidence and state asset privatization push firmly to the test as the government eyes $824 million from investors.
• The KPC listing is a defining moment for Nairobi’s bourse as the government turns to markets to fund growth without piling on debt.
• With Sh106 billion on the line, the KPC IPO could either reignite Kenya’s capital markets or revive old fears over state-led listings.

After more than a decade without a major state-backed equity offering, the Nairobi Securities Exchange (NSE) is set for a landmark revival as the Government of Kenya moves to partially privatize Kenya Pipeline Company (KPC) through an initial public offering (IPO) that could raise $824 million (KES106.3 billion).

The transaction, officially launched by Treasury Cabinet Secretary John Mbadi at the NSE on Monday, involves the sale of 11.8 billion KPC shares, representing a 65 per cent stake, at an offer price of $0.070 (KES 9) per share. The pricing implies a market capitalization of approximately $1.27 billion (KES163.6 billion), instantly placing KPC among the most valuable listed firms on the bourse.

The offer will run from 19 January to 19 February 2026, with listing expected on 9 March 2026, making it the most significant equity capital markets transaction in Kenya since the Safaricom PLC IPO in 2008.

“The Kenya Pipeline Company IPO offer carries profound significance, not only because of the strategic importance of the company, but because it represents the first Initial Public Offering in our market in over 10 years. Today’s event represents the realization of a long-held aspiration to see our primary market re-energized and to witness the return of IPOs as a central pillar of Kenya’s capital markets,” explained Kiprono Kittony, Board Chairman, NSE_PLC

Kenya Pipeline Company: A strategic asset comes to market

Kenya Pipeline Company is a critical component of the East African country’s energy infrastructure, operating an extensive pipeline network that transports petroleum products from the Port of Mombasa to major consumption centres across Kenya and into the wider East African region. The firm plays a near-monopoly role in fuel transportation, underpinning national energy security and supporting regional trade flows.

Speaking during the IPO launch, Treasury CS John Mbadi described the listing as part of a broader reform agenda aimed at unlocking value from state-owned enterprises (SOEs) while deepening Kenya’s capital markets.

“The Kenya Pipeline Company IPO is a critical step in unlocking value from public enterprises while empowering citizens to invest directly in the country’s strategic infrastructure,” Mbadi said.

He added that the transaction aligns with government efforts to improve transparency, efficiency and accountability in state corporations while mobilising domestic capital to fund infrastructure expansion without excessive reliance on debt.

Ending a prolonged IPO drought at the Nairobi Securities Exchange

The KPC IPO effectively ends a prolonged drought of large equity listings at the NSE, which has struggled with low liquidity, thin trading volumes and declining investor participation in recent years.

Market activity has largely been driven by secondary market trading, with few new listings and several high-profile delistings dampening sentiment. Analysts say the KPC offer could act as a catalyst for renewed investor interest, particularly if it attracts strong retail participation.

NSE officials welcomed the transaction, noting that it signals renewed confidence in Kenya’s capital markets and reinforces the exchange’s role as a platform for long-term capital formation. “This IPO reinforces the Nairobi Securities Exchange as a key engine for mobilising capital and broadening wealth creation among Kenyans,” the NSE said.

Kenya’s first fully electronic IPO

The KPC transaction will be executed as Kenya’s first fully electronic IPO (e-IPO), allowing investors to submit applications digitally. Authorities say the move is designed to lower participation barriers, reduce paperwork, and expand access—especially among younger and tech-savvy retail investors.

The offer period has also been extended to one month, longer than previous IPOs, to allow broader participation across retail and institutional investor segments.

Share allocation has been structured to balance domestic and foreign participation: 20 per cent local retail investors, 20 per cent local institutional investors, 20 per cent regional investors from the East African Community, 20 per cent international investors, 15 per cent oil marketing companies, and five per cent reserved for KPC employees.

Read also: EACOP: East Africa’s pipeline to prosperity over 60% complete

A heavily advised transaction

The IPO is being executed by a consortium of advisers led by Faida Investment Bank as lead transaction adviser, alongside Dyer & Blair as lead sponsoring broker and Francis Drummond & Company as co-sponsor.

Advisory firm PwC is acting as reporting accountant, while legal advisory services are being provided by TripleOKLaw and G&A Advocates. Image Registrars is serving as the share registrar, with Belva Digital and Apex Porter Novelli handling digital infrastructure and communications. Receiving banks include Co-operative Bank, KCB, and Stanbic Bank.

Officials say the extensive advisory structure reflects the complexity and national importance of the transaction, as well as heightened scrutiny from regulators, investors and the public.

Implications for Kenya’s financial markets

Market analysts argue that the KPC IPO could have far-reaching implications for Kenya’s financial markets if executed successfully. First, the transaction is expected to significantly boost market capitalisation and liquidity at the NSE, particularly given the size of the offer and the anticipated participation from both local and international investors.

Second, it could help re-anchor the NSE as a credible destination for long-term infrastructure and utility investments, a sector that has been under-represented on the bourse.

Third, the IPO may pave the way for additional listings of state-owned firms, including in energy, transport and utilities, providing the government with a non-debt financing alternative at a time of fiscal pressure.

“The success or failure of the KPC IPO will be closely watched because it sets the tone for future privatisations,” said a Nairobi-based capital markets analyst. “If this works, it becomes easier to sell subsequent transactions.”

Stable revenues, but governance under scrutiny

Proponents of the IPO point to KPC’s relatively stable revenue streams, underpinned by long-term fuel transportation contracts and growing regional demand for petroleum products.

However, critics have long questioned whether the company is ready for public ownership, particularly given its history of governance challenges, procurement controversies and operational inefficiencies.

Civil society groups and some economists have previously argued that privatising a strategic monopoly without first undertaking deep governance reforms risks transferring inefficiencies to public shareholders.

“There has been persistent concern that Kenyans could end up buying into a company whose underlying governance issues have not been fully resolved,” said an energy policy analyst who has previously reviewed KPC’s performance.

Concerns over valuation and timing

Others have raised questions about the valuation and timing of the IPO, especially against the backdrop of a fragile macroeconomic environment, high interest rates and subdued investor sentiment.

Some market commentators argue that selling a 65 per cent stake in one tranche could dilute state control over a critical asset, while others worry that pricing pressure could emerge if demand falls short of expectations.

“There is a legitimate debate about whether this is the right time to bring such a large offering to market,” said a former regulator. “If the book is not fully covered, it could dent confidence rather than restore it.”

Public interest versus fiscal needs

The IPO also revives an old debate in Kenya’s political economy: whether privatisation is being driven by long-term market development goals or short-term fiscal needs.

Critics note that the government is under pressure to raise revenue amid constrained access to external borrowing, raising concerns that proceeds from the IPO could be used to plug budget gaps rather than reinvested into KPC’s infrastructure.

Treasury officials, however, insist that the transaction is part of a structured reform programme and not a fire-sale of public assets.

Despite the concerns, many observers agree that the KPC IPO represents a defining moment for Kenya’s capital markets. If successful, it could restore confidence, deepen financial inclusion, and reposition the NSE as a regional investment hub. If mishandled, it could reinforce scepticism about privatisation and public-sector listings.

For retail investors, the IPO offers a rare opportunity to own a stake in a strategic national asset. For the government, it is a test of credibility in executing market-based reforms. And for the NSE, it is a long-awaited chance to demonstrate that Kenya’s capital markets can once again support transformative economic transactions.

As the offer period opens, all eyes will be on investor appetite—and on whether this long-anticipated IPO can deliver on its promise to reshape Kenya’s financial markets.

Read also: Asahi Diageo East African Breweries Deal Sends EABL Shares Higher on the Nairobi Securities Exchange