In the annals of Nigerian corporate history, few events have garnered as much attention and speculation as Transcorp Power Plc’s recent listing by introduction on Nigerian Exchange Limited.

Amidst a backdrop of market scrutiny, the subsidiary’s strategic move under the stewardship of its parent company, Transnational Corporation Plc, merits a closer examination.

Analyzing the facts and figures behind this decision reveals not only its strategic merit but also its legal and compliance soundness.

Transcorp, a leading conglomerate with diversified interests across various sectors, orchestrated the listing by introduction of its subsidiary, Transcorp Power Plc, on Nigerian Exchange Limited. This move comes as part of a broader strategic vision aimed at optimizing the company’s portfolio and maximizing value for shareholders.

The listing by introduction, as executed by Transcorp Power, was not merely a symbolic gesture but a calculated maneuver to capitalize on the prevailing market dynamics and fortify its position in the Nigerian power sector. During a listing by introduction, a parent company simply lists the subsidiary’s shares on a stock exchange without raising additional capital or offering shares to the public.

This approach is legal, and has become more common recently, typically used when the parent company wants to divest itself of a subsidiary while still maintaining control over the newly listed entity.

By listing the subsidiary by introduction, the parent company can offer existing shareholders the opportunity to trade their shares in the subsidiary on the public market if they wish, without diluting the parent company’s ownership.

Prior to the listing, Transcorp Power meticulously ensured compliance with SEC and NGX regulations, meeting the free float requirements set forth by the regulatory bodies. This demonstrates the company’s commitment to transparency and regulatory compliance, setting a solid foundation for its debut on the exchange.

Upon listing, Transcorp Power wasted no time in leveraging its market presence to create liquidity and facilitate trading activity. A total of 40 million shares were sold into the market on the first day of trading, providing investors with ample opportunities to acquire stakes in the company.   This initial surge in trading activity reflects the market’s enthusiasm for Transcorp Power’s listing and underscores the company’s ability to meet investor demand.

Building on this momentum, Transcorp Power further bolstered market liquidity by releasing an additional 87 million shares on the second day of trading.

This strategic move, executed through a wider network of brokers, has enabled a broader base of investors to participate in the market, further enhancing liquidity and diversifying ownership in the company.

Beyond the immediate benefits to investors, the listing of Transcorp Power carries significant implications for the broader market and government revenue.

Listed companies are inherently more tax-compliant, contributing to increased revenue for the government and fostering a culture of fiscal responsibility among corporate entities. By listing on NGX, Transcorp Power demonstrates its commitment to operating in a transparent and accountable manner, aligning with the government’s efforts to promote economic growth and stability by enhancing Nigeria’s power infrastructure.

Recall that earlier in February, the Senate Committee chairman on Capital Market & Institutions, Senator Osita Izunaso, had called for the listing of energy companies on the exchange, saying it will help the economy to grow.

Speaking with journalists on the trading floor of the exchange during a visit, Izunaso said, “The stock exchange and the capital market are the future of our economy, it is the future of our generation and it is something that we must all support. We also have to encourage other companies to do so.

“I will also request other people who have not listed to do so. On our part as legislators, we will also advise the executive to use the low-hanging fruits to advise the DisCos, the GenCos that are not listed to come to the capital market, so we can all help to grow the economy.”

Speaking at the exchange upon the listing, Transcorp Power’s Managing Director/Chief Executive Officer, Peter Ikenga, said, “This is a testament to our unwavering dedication to powering Nigeria’s growth.  We embark on this new chapter with a sense of purpose, innovation, and a commitment to continue to deliver sustainable energy solutions in Nigeria and beyond.”