Transcorp Return Spikes as Valuation Jump to N125b

With a 165% return year-to-date return, equities investors in the stock market are taking interest in Transcorp Plc.’s shares as reflected in the diversified company’s positive price movement.

Its record year-to-date return was driven by the conglomerate stock market price movement in the last six months. Transcorp records a 169.30% gain in six months, reflecting the effect of Femi Otedola’s share purchase among others.

The conglomerate share price was re-rated after the Elumelu’s fight dirty to retain control of the conglomerate. Otedola had made the move to join the company’s board as a single largest investor. However, Otedola who cannot play the second fiddle was met with a hostile reaction by the Elumelu.

Dr. Awele Elumelu, in reaction to the share purchase by Otedola, acquired 5.076% of Transcorp Plc from a large free float level for Heir holdings to retain control. At the close of business on Friday, the stock market placed N124.789 billion on Transcorp. The company has 40.647 billion outstanding shares priced at N3.07 per unit.

While the market keeps hope alive about the future, Transcorp Plc has proven to be a bad investment for a number of Nigerians that picked the stock at N7.50 when it launched its initial public offer in 2007.

Not many Nigerians that invested their hard-earned money in public companies benefited from either dividend payments or capital appreciation.

The conglomerate underwhelming earnings performance over the years sent negative signals about investing in the Nigerian stock market up to date.

Transcorp Plc reminds a large number of people that threw their money into the wind about the pre-financial crisis IPO festival in Nigeria. The company has rarely been out of the limelight since its creation in 2005 by a group of Nigerian business leaders with the support of then President Olusegun Obasanjo.