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HCB IPO Case study

Hidroelectrica de Cahora Bassa (HCB) is the concessionaire for the largest hydroelectric power generation operation in the southern hemisphere. The company has capacity for approximately 2,075MW of power, which it distributes locally in Mozambique, imports to South Africa and to Zimbabwe. HCB is therefore an important player in the SADC region and a valuable contributor to the energy matrix, with an environmentally clean and sustainable business model, supporting a number of jobs across the region. The company also recently celebrated its 11th anniversary following the reversion of the Cahora Bassa enterprise (the asset) to the government of Mozambique, a key shareholder in HCB. Being one of the country’s most significant assets, HCB has ambitions for further expansion – and being an integral component of the national economy – the company is also a contributor to social development, with the interests of the citizens of Mozambique at heart.

It is with this context that the company made the decision to go public, with the need to facilitate access to alternative sources of capital whilst promoting economic and financial participation among the country’s citizens through a restricted offering to Mozambican citizens and qualifying corporates, only. The ethos for the transaction was therefore to promote “maximum reach and inclusion” in placing HCB’s shares in the hands of its people. Being the lead advisor to HCB in the transaction, YWC team had to be innovative in the structuring process – conventional IPO structures cannot work due the strict requirements of the transaction and the nature of the local financial markets. Moreover, placing an issuance of this size, under these conditions, in a market where there are only five listed equities and limited liquidity, necessitated an unconventional approach.

Our team worked as lead advisor to HCB and led the structuring, pricing and placement of the IPO. Our scope of work entailed preparing the company for the IPO, whilst also being fundamentally involved in the development of enablers for the success of the transaction; including playing a prominent role in transaction structuring, conducting nationwide roadshows and the development of innovative subscription channels; which have been created to ensure maximum reach and inclusion. Individuals were able to place purchase orders through various Mozambican banks’ branch networks but also through a USSD mobile platform, a mobile application and via internet banking. With fewer than eight thousand registered investors on the stock exchange at the time, the following results were achieved:

  • The IPO was the largest capital markets transaction to date in Mozambique, and had the aim of placing 686,887,315 shares with Mozambican individuals, companies and institutions at a price of MT 3.00 per share;
  • The demand for the IPO largely exceeded supply, amounting to a total of 1,510,366,810 shares and equivalent to a ratio of 2.2x oversubscribed. Due to the high level of demand, HCB decided to increase the amount of capital to sell from the initial 2.5% to 4.0%, equivalent to 1,099,019,704 shares;
  • In a banking syndicate comprised of 15 Mozambican banks, 19,210 orders were received from 16,787 investors (attracting over 8000 new investors through the development of new subscriptions channels (e.g. USSD platforms and banking apps)
  • With this IPO, the number of investors registered in the Central Depository System of the Mozambique Stock Exchange almost tripled, thus highlighting the success of this transaction to everyone involved, and to Mozambican capital markets in particular.


See BVM (Mozambican stock exchange) website link:

See interview with CNBC and business day TV:

Mesh interview on Power FM