Quickmart IPO price 7.2pc above fair value, Sterling Capital says

Kenyan investment firm Sterling Capital has assessed Quickmart's fair value at Sh6.96 per share, which is 7.2 percent lower than the retailer's planned offering price of Sh7.50. The upcoming listing on the Nairobi Securities Exchange (NSE) will see Sokoni Retail Kenya, controlled by investment firm Adenia, sell two billion existing shares, representing 50 percent of Quickmart.

The transaction, spanning from October 5 to October 30, aims to raise Sh15 billion for Sokoni Retail Kenya, allowing Quickmart to fund its expansion through internally generated cash flows. The shares are slated to begin trading on the NSE on November 12, 2026.

According to Sterling Capital, Quickmart's revenue surpassed Sh50.4 billion in the 2025 financial year, while its EBITDA margin expanded by 10.1 percent. However, the firm noted that sales growth at current stores decelerated to 5.7 percent in FY2025 as consumer foot traffic declined, prompting concerns over the company's capacity to maintain its growth trajectory.

Sterling Capital projects that earnings per share (EPS) will lag behind management expectations, falling about 7.6% below guidance in FY26 and widening to 16% in FY27, as the firm adopts a more cautious stance on margins.

Estimating a dividend payout of Sh0.41 per share in FY26, Sterling Capital projects a yield of approximately 5.5 percent at the offering price of Sh7.50. The firm also cautions about potential risks to the share price stemming from further share sales by Sokoni Retail Kenya. They highlight that additional disposals could intensify selling pressure following the listing, potentially impacting investor confidence.