The wait is over! Investors have been eagerly anticipating a new IPO since the last one in 2022. Remember EFinance? IPO investors saw 50% returns on the first day alone. Now, the market is buzzing again and all eyes are on Act Financial, hoping it could be just as rewarding.
Investing in the Act Financial IPO on Thndr is a risk-free investment (read more below on why we say this!) that can yield returns for everyone from first timers to savvy investors who are looking to make their first mark with this IPO.
If this sounds like a potential opportunity for you (it should!) we’ll guide you on all the ‘must-knows’ of this IPO.
To start investing – you need to know the company – so, who are Act Financial?
Act Financial is an Egyptian investment company founded in 2015, focusing on the Egyptian stock market. They follow an active investment approach – which means that they buy a stake in a company with the aim of influencing its decisions, unlike a passive investor who invests and sits back.
Here’s what really excites us about this IPO:
The upcoming IPO for Act Financial is an exciting opportunity several reasons:
- It’s the first IPO Since February 2022: We are eager to see if this marks a new era in the Egyptian Stock Market following the mega Ras El Hikma deal.
- It’s a different way to invest in stocks: You can be part of a company that invests in publicly listed companies and owns an influencing stake in those companies.
- And most importantly it’s a ‘risk-free-your-money-guaranteed’ type of IPO.
Is this investment for me?
This IPO is best suited for two types of investors:
- I’m a newbie investor: If you’re relatively new to the investment space then this is the easiest way to start getting into the playing field, with a risk free opportunity (keep reading to know more on this). This IPO will allow you to learn more about the stock market and how to make money.
- Active investment-seekers: If you’re seasoned in the stock market, then you know you need to do your research. Every new IPO presents a new investment opportunity. However, similar to any investment in a company you make, it is important to understand the business model, growth potential, quality of leadership and financial health. It’s equally important to determine whether it is fairly valued, undervalued or overvalued. We list out below the main metrics we believe you should review.
What the beginners need to know:
First off it’s important to understand what an IPO is, and how it works – we recommend you you go through our light read here on the Thndr learn platform to do this.
Yes, we mean it when we say ‘risk-free’: Introducing you to the stabilization fund.
Act Financial has a 1-month stabilization fund that covers 100% of the IPO retail offering. This means that on day 30 of the IPO, you can sell your shares for the price you bought them at. If you bought them for EGP 2.9/share for example, and their price fell to EGP 1/share, you can sell them back for EGP 2.9/share. Also, to make this even more compelling, Thndr will be waiving transaction fees if you sell in the stabilization fund (doesn’t get more risk-free than this!)
Here’s how it works:
- Will be sending out an email to the users if the price falls below the IPO Price (2.9 EGP ) within the 30 days of the stabilization fund period with the instructions required.
- After 30 days, if the price of the stock is below the IPO price , orders placed for the stabilization fund will be executed with the initial IPO price (2.9) and the amounts will be added to your wallet,
- Note that this is only limited to users who subscribed in the IPO as any traded quantity post the trading start date will be excluded.
What to watch out for?
- Oversubscription: It is very common for IPOs to be oversubscribed, meaning that the demand from investors to buy shares in the IPO exceeds the number of shares offered in the IPO. Allocation of shares is on a pro-rata basis, meaning that the investor’s order sizes are divided by the degree of oversubscription, where you’ll know your final share count. This might reduce the size of the investment you intended to go for. In case of oversubscription, the extra money that wasn’t used to purchase shares will be refunded to your Thndr wallet. You can withdraw this money to your bank account or invest it on Thndr.
Let’s take an example: If you place an order for 20,000 shares but the IPO is oversubscribed 20 times, you will only receive 1,000 shares (1 over 20 of what you ordered, based on the oversubscription rate).
It’s important to know that this is very common during an IPO, and bound to happen to the majority of investors – setting your expectations on this will help you manage your expected returns better.
While oversubscription is common, it’s also important to be aware of the possibility of undersubscription. If the IPO is undersubscribed, you might end up needing more money than you originally planned for.
For example: If you place an order with 4x your money, and it ends up being subscribed by only 2x, you would need to deposit fund in your wallet equivalent to the difference on the first trading day or sell your shares. This is a crucial consideration to keep in mind as you plan your investment strategy for the Act Financial IPO.
However, you also need to take watch out for undersubscription
- Understanding the risks of time: Because this IPO comes with the perk of the stabilization fund, it also comes with the risk of missing the deadline to be part of it in case the stock price falls below IPO price (like we said above, this is on day 30). So, make sure you mark your calendars! Additionally, when you enter the IPO you need to watch out & plan for your money being locked up until the subscription period is over, again in case the stock price falls below the IPO price and you decide to wait until day 30 and redeem your shares back to the subscription fund – so, you need to be wary that your money-back guarantee is not immediate, and will take 30 days to be released. In other words, everything risk-free about this IPO comes with a time restriction.
I’ve made it till here & I’m hooked. Now, how do I start?
Subscription in the public offering starts from 9th of July till the 23rd of July; to participate in Act Financial’s IPO, follow these simple steps:
- Download the Thndr app and open an investment account (we’re assuming you already have though!)
- Top up your wallet – We recommend making sure your wallet is set and ready for when subscription opens – so make sure to get this done early on!
- Place your order! Straight from the Thndr app just search ‘ACTF’ & submit a buy order for no less than 1,000 shares & no more than 1,750,000 shares
If you’re an active investment-seeker – dive in:
As a more experienced investor, this is a refresh on what we recommend you need to review before taking further action in this IPO:
- Industry
- Outlook
- Growth
- Barriers to Entry
- Company
- Historical Performance
- Management Quality
- Company Plans & Products
- Competitive Landscape
- Valuation
- Discounted Cash Flows
- Multiples
If you’re not on Rumble, make sure to subscribe where you can find information on all the key factors mentioned above & a recent exclusive interview with Mostafa Abdelaziz and Karim Neema, Co-founders and Managing Partners at Act Financial.
For more in depth details we also have the IPO prospectus – which you can review here, and the company’s IPO teaser which you can view here.
If you’re interested in participating in the private offering, please fill in this form to complete the offline process
The minimum subscription is 1,750,000 shares and it’s important to note that there is no stabilization fund. Once the form is filled, we’ll reach out with more details and exact process. Please note that the deadline for the private offering is earlier, and ends on July 18th.
If you have any questions for us regarding the IPO, we will be conducting a Live Q&A Webinar soon, please put your questions in this link here and we will be answering them.
