The shares of VFD Group Plc rallied by 12.5 percent over the past two trading days on news of regulatory approval to the company’s successful N50.1 billion Rights Issue. Closing at N12.50 per share on Friday, March 13, shareholders have gained 25 percent on the Rights Issue shares of N10 per share, which would now be listed on the Nigerian Exchange Limited (NGX).

The Rights Issue was 100 percent subscribed, reflecting investor confidence in the leadership of the Group. The proceeds of the Right Issue should enhance the capacity of the Group to consolidate on its fast-growing businesses and incubate new verticals to sustain its impressive growth.

The global market is more than ever, volatile, as the US-Isreal-Iran war upset the unrest in the oil-rich Middle East. The missiles are rattling the world, as crude oil price stoke new uncertainties across markets. From Europe to United States and other parts of Americas, stock markets turned bearish, with indices testing new low levels last seen five months ago.

In Nigeria, whilst the sharp increase in petrol prices raises concern about renewed inflationary pressure, the equity market has been relatively stable, notwithstanding the daily swings occasioned by profit taking on a few counters. In the past week, a few stocks have particularly been defensive on the Nigerian Exchange, validating opinions that even amidst uncertainties, investors would continue to take a bet on stocks with fundamental upsides.

The shares of VFD Group is one of those counters that has been firm amidst the global swings in asset prices, maintaining a defensive posture as investors take comfort in the fact that it trades significantly below analysts’ intrinsic valuation of the Group.

Nonso Okpala, group chief executive officer, VFD Group Plc, noted, “After the success of our Rights Issue, our priority is flawless execution. We have identified the opportunities; hence we would be disciplined in allocating capital efficiently to build scale. We are also dedicating capital to new verticals, as we seek to consolidate our portfolio to deepen our diversification and growth trajectory. We would continue to leverage our sound governance structure to balance risks and opportunities, as we reaffirm our commitment to create sustainable value for all our stakeholders.”

Folajimi Adeleye, executive director, Finance & Investor Relations, VFD Group Plc, stated, “Our current share price is a significant discount to the intrinsic value, and we reckon analysts’ consensus about this fact. We are also aware that some foreign and local institutional investors who seek to invest in the Group are mindful of the overall liquidity. Interestingly, the successful closure of our Rights Issue and regulatory approval now solves the puzzle, as it increases the float and market capitalisation of the Group. This ultimately affords strong liquidity in the stock and opens up opportunities for more local pension fund managers and foreign institutional investors to take stakes in the Group.”

Adeleye added, “We are building a unique ecosystem that would create superior and sustainable value to our shareholders, because we are addressing critical voids in our chosen markets and we are disrupting ineffective structural norms undermining growth in selected sectors of the economy. Our philosophy is that a business can do well and do good, because these are complementary objectives and not competing as some tend to think. We are incredibly grateful to our shareholders for the success of the Rights Issue, as it provides the vista for our next growth phase and reinforces our energy to deliver even better results. We would accelerate our return on equity from the 20 percent level in 2025 financial year, as we leverage scale efficiencies and extract synergies across our Group to deliver on our vision.”

Yadinma Onwu, executive vice-chairman of Fund Matrix Asset Management, noted, “VFD Group has distinguished itself as a unique investment group. They take strategic stakes in specialised private and public entities whilst also incubating start-ups to rival matured operators in different sectors through innovation and service delivery.”

“The Group became one of the core shareholders of the Nigerian Exchange Group, as they bought into the Exchange when many capital market operators didn’t see the inherent value in it after demutualisation. It’s the same strategy they used in acquiring positions in the Central Securities Clearing System Plc (CSCS). These are obviously market infrastructures that would benefit from the economic renaissance of Nigeria,” Onwu noted.