GTI Places Dangote Refinery Value at ₦493 Per Share, Below ₦525 IPO Price
GTI Research has estimated the fair value of Dangote Petroleum Refinery and Petrochemicals at ₦493 per share, putting its valuation below the company’s current ₦525 IPO offer price.
The assessment comes as investors continue to examine the pricing of Dangote Refinery’s public share offering, which is seeking to raise about ₦2.15 trillion through the sale of 4.1 billion shares.
According to a 22-page valuation report prepared by GTI Research and published on September 16, the research firm considers the refinery’s ₦525 offer price to be above its central valuation estimate. The IPO is scheduled to remain open until October 13, 2026.
GTI’s valuation scenarios
GTI’s assessment presents different possible values depending on the refinery’s future performance.
Its estimates are:
- Conservative case: ₦328 per share
- Base case: ₦503 per share
- Probability-weighted fair value: ₦493 per share
- Bull case: ₦640 per share
The ₦493 probability-weighted valuation is approximately 6.1 percent below the ₦525 IPO price, while the base-case estimate is about 4.2 percent lower.
The higher ₦640 valuation reflects a scenario in which the refinery delivers stronger growth and successfully executes its expansion plans.
Why the valuation debate matters
The GTI report comes amid differing views among research firms over what Dangote Refinery should be worth.
Some analysts have placed values above the IPO price, while GTI’s assessment suggests that much of the refinery’s anticipated future growth may already be reflected in the ₦525 offer price.
The refinery’s valuation is particularly difficult to assess because it is not simply being valued on its current earnings. Its future expansion and expected increase in production capacity are major components of the investment case.
Dangote Refinery currently has a stated capacity of about 700,000 barrels per day, with plans to expand to approximately 1.4 million barrels per day.
Peer comparison raises another question
GTI also compared Dangote Refinery with other refining companies.
The research found that comparable companies trade at lower multiples of earnings and operating profitability than the valuation implied by Dangote Refinery’s ₦525 offer price.
However, GTI noted that a straightforward comparison with existing refiners does not fully capture Dangote Refinery’s planned capacity expansion.
The refinery’s future production growth therefore plays a significant role in determining whether its current valuation can be supported by future earnings.
IPO proceeds to support expansion
The public offering is designed to raise fresh capital for the refinery’s expansion programme.
At ₦525 per share, the offering is expected to raise approximately ₦2.15 trillion, making it Africa’s largest IPO to date. Reuters reported that the refinery is valued at roughly ₦63 trillion before the new shares from the offering are included.
The company has said the additional capital will help finance its plans to increase refining capacity and strengthen its operations.
What investors are watching
The contrasting valuations highlight the uncertainty surrounding Dangote Refinery’s long-term market value.
At the heart of the debate is whether the refinery can translate its enormous production capacity, improving profitability and planned expansion into sustained earnings growth.
GTI’s report places its probability-weighted value below the current offer price, while its bullish scenario places the value considerably higher.
With the IPO still open, the valuation debate is therefore likely to remain a major focus for investors as they assess the refinery’s earnings prospects, expansion plans and the price being offered for its shares.
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