Cell C kisses R3 billion goodbye
Cell C has announced that it will launch at R26.50 per share, between R3 and R9 per share lower than it initially planned to.
This also cuts the company’s market capitalisation following its initial public offering from R10–R12 billion to R9 billion — more than R3 billion less than it hoped to raise at the top end of its offer.
The company announced its final IPO share price in a statement on the JSE News Service on Friday, 21 November 2025.
“Following the ongoing bookbuild process, Blu Label Unlimited approved a final Offer Price of R26.50 per offer share,” it stated.
Blu Label is Cell C’s majority shareholder and owns close to 95% of the company following a significant restructuring ahead of the listing.
Cell C and BLU subsidiary The Prepaid Company (TPC) initially targeted gross proceeds of up to R6.5 billion from the sale of shares, including an overallotment of R338 million.
However, this has also now changed. “As noted in the pre-listing statement, the offer also included an overallotment option,” Cell C stated.
“This was granted by the selling shareholder to the stabilisation manager to purchase up to 9,520,000 overallotment shares.”
This was with the purpose of covering short positions for ordinary shares overalloted in the offer. “It is no longer intended to overallot any ordinary shares in the offer,” Cell C said.
The offer also includes an allocation of up to 68 million shares to a new empowerment ownership structure, with approximately R2.4 billion worth of shares earmarked for the vehicle.
Cell C’s presentation stated that the proceeds would be used to settle certain interest-bearing borrowings and other debt obligations.
“Additionally, a portion of the funds will be earmarked for dividends to shareholders, reflecting BLU’s commitment to delivering value to its investors,” it said.
The IPO comprises up to 173.4 million ordinary shares, alongside an additional 9.52 million shares available through an overallotment option.
This collectively represents up to 53.8% of Cell C’s issued share capital post-listing, with 340 million ordinary shares in issue at the time of admission.
No love for Cell C
Many top analysts have expressed doubt about Cell C’s prospects, given the local telecommunications environment and its market position.
Capicraft Investment Partners CEO and portfolio manager Drikus Combrinck said the South African mobile market is highly competitive.
He pointed to MTN and Vodacom’s recent results, which showed that their local operations are under pressure.
Another challenge is that Cell C is beholden to MTN and Vodacom to use their network infrastructure, which can result in margin pressure.
Benguela Global Fund Managers CIO and co-founder Zwelakhe Mnguni shared Combrinck’s view on Cell C.
“I am cautious about Cell C’s growth momentum after the listing. To achieve growth in the highly competitive local telecommunications market is difficult,” he said.
Sasfin Securities’ David Shapiro said he does not like the South African telecommunications industry as an investment sector.
“It is far too competitive. As soon as you gain customers, you can lose them when a lower-priced offer comes to the market,” he said.
PSG’s Schalk Louw shared Shapiro’s opinion, stating that with Vodacom, MTN, Rain, Telkom, and Cell C competing for customers, it is challenging.
“Many telecommunications players are competing in a tough market environment. It is not easy,” Louw said.
However, SouthernCross Capital CIO and portfolio manager Cobus Potgieter has a different view.
He said he was excited about Cell C’s listing. “It is good to see the turnaround play come to market,” he said.
“I have liked Cell C inside of Blu Label Unlimited for the past year. It was clear that its MVNO strategy is a great business model,” he said.
He highlighted the successful launch of Capitec’s mobile product, where Cell C serves as its backend MVNO provider.
Potgieter pointed out that he will still need to properly examine the finances and valuation before deciding whether to invest in the company.
In addition to lowering its initial share price, Cell C also announced that the bookbuilding period for the offer will be extended until 16:00 on Friday, 21 November 2025.
“This extension provides investors with additional time to consider the final offer price as part of their investment decisions,” it said.
Cell C financials as at 31 May 2025
| Cell C financials — 31 May 2025 | ||
|---|---|---|
| Element | 31 May 2025 | 31 May 2024 |
| Assets | R15.02 billion | R14.1 billion |
| Liabilities | R16.06 billion | R17.3 billion |
| Negative equity | -R1.04 billion | -R3.18 billion |
| Revenue | R11.1 billion | R10.7 billion |
| Before-tax profit/loss | R264.4 million | -R22.4 million |
| After-tax profit | R2.19 billion | R279.5 million |
| Blue Label’s share of profits | R1.51 billion | R176.6 million |
| Reverse 2019 impairment | (R1.61 billion) | — |
| Net Blue Label share of losses | -R98.7 million | — |
| Blue Label recognised deferred tax of R2.03 billion, boosting Cell C’s after-tax profit. | ||
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