My thoughts on CIPLA’s IPO!

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The Money Engineer

I hope by now you have atleast heard of CIPLA’s (Quality Chemicals) IPO which by the way is closing tomorrow. An IPO is an initial public offering which simply means a company is offering its shares to the public. In developed economies IPO’s are primarily how early investors earn back their money. In Uganda however the market is still growing and the last IPO was Umeme in 2012. People abroad don’t buy plots of land they buy shares!

My first encounter with these shares business was in 2008 when Safaricom listed. I didn’t understand shares but there was too much hype so I took out a Ushs 5m salary loan and bought shares. My intention was to sell off the shares within a few weeks and make a killing. Needless to say I was very wrong as the share price performed poorly and traded below IPO price for a while. I quickly cut my losses and sold off the shares to buy a plot of land. Bad decision! 10 years down the road Safaricom price has grown by almost 500%. I wish I had kept my shares and held them for the long run.

My next experience was with Umeme IPO in 2012. I more than doubled my investment with Umeme so did many others! Hustle free dimes! I know of billionaires who became bigger billionaires from this IPO! And this all happened while the public sentiment towards Umeme was quite negative at the time. Never trust public opinion!

Enter CIPLA. I have only invested a modest amount with CIPLA and hope to hold it with a 5 to 10 year horizon. Without boring you with a detailed analysis of the prospectus for me it makes sense. People are sick and more people will get sick from AIDS, Hepatitis, Malaria, Diabetes. CIPLA makes drugs to treat these diseases! Simply means demand will always be there and CIPLA has positioned itself to supply theses drugs to regional gov’ts and agencies.

Same logic with telecoms (Safaricom), utilities (Umeme), and pharmaceuticals (CIPLA) which are almost basic needs in today’s society.

So if you have an idle 250k (minimum investment) or more why not consider investing? Simply contact your broker for guidance. You may thank me in 10 years!

Disclaimer. The views expressed are those of the author and should not be relied on for investment decisions. Seek the advise of a professional financial advisor. Shares is risky but rewarding business!

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