Tour and travel firm, Globetrotter Agency Limited, has been entered into the Nairobi bourse-listing incubation programme for nurturing into an investor-ready company ahead of actual listing early next year.
The incubation process, also called Ibuka in Kiswahili, takes between six to 12 months and involves improving financial, technical and other business support.
This is followed by the acceleration stage in which firms raise capital ahead of listing once the NSE, the Capital Markets Authority and the Kenya Association of Stockbrokers and Investment Banks, approve a firm’s status as fit for elevation.
Globetrotter’s chairlady Tina Patel said the company decided to go public to raise funds for expansion for the family-owned business as well as gain more visibility for faster growth.
“We launched operations four years ago and in 2017 realised a turnover of Sh142 million which we feel would have been higher if we had adequate funds to take up new opportunities arising from our operations,” she said.
The firm mainly deals in tour and travel bookings targeting corporate executives and high- net-worth individuals as well as walk-in clients.
Globetrotter is the second firm to be enlisted on the Ibuka programme after Jambo tea maker, APT Commodities Limited, came on board last February 1.
The Ibuka programme helps companies to streamline operations on bookkeeping, management structures, operations and company policies, among other business aspects, with the main aim of enhancing their corporate governance structures ahead of listing.
NSE chief executive Geoffrey Odundo said successful Small and Medium Enterprises(SMEs) shying away from listing on the Nairobi Securities Exchange (NSE) were denying themselves access to over Sh1.2 trillion in total that is available to fund their expansions.
The NSE boss said pensions, insurance, saccos and high-net-worth individuals, among other investors, have the cash but were looking for profitable local companies to invest in and needed assurance of a company’s adherence to ethical business that benefits people, the environment as well as makes profits for shareholders.
“We need to reduce reliance on bank loans and private equity funds that come with conditions, making it difficult for companies to realise their full potential.
The capital generated from the market has no conditions and timelines for repayments but creates shared value for both the company owners and the shareholders,” said Mr Odundo.
“Private equity partners expect returns for their investments with a risk of ceding part of your shareholding to them in case of default and bank loans are costly, with many conditions attached to them.
“Money via sale of shares has no conditions and returns expected come from the business where no one penalises you in case of a drop in profits,” he said.