Top parastatals have sold a combined 24.76 percent stake in Kenya Pipeline Company (KPC) to an identified foreign investor less than eight months after spending billions to buy the shares.
A source familiar with the deal said at least eight parastatals sold their shares in the firm, which were listed on the Nairobi Securities Exchange (NSE) on March 9, to a foreign institution.
The State pressured cash-rich parastatals in February to buy into the initial public offering (IPO) of KPC to avoid the sale being declared invalid after high- net-worth investors snubbed the deal.
This saw the National Social Security Fund (NSSF) buy shares worth Sh38.5 billion, followed by Public Servants Pension Scheme (Sh13 billion), County Workers Pension Fund (Sh3.6 billion) and Unclaimed Financial Assets Authority (Sh3.2 billion).
Pension funds for Kenya Power, KPC and Kenya Ports Authority (KPA) workers also participated heavily in the offer.
President William Ruto on Tuesday hailed the transfer of the 4.5 billion shares of KPC through the Nairobi bourse as a mark of confidence on Kenya’s capital markets.
‘In demonstration of growing confidence, private investors acquired 25 percent stake in Kenya Pipeline Company from public entities,’ President Ruto said in his address at the Mashuja Day fete, without disclosing the identity of the parastatals.
About 13 parastatals splashed Sh64.23 billion on the Kenya Pipeline IPO, taking a 38.35 percent stake in the firm.
The NSSF has an estimated 23.3 percent stake in KPC, Public Servants Pension Scheme (7.94 percent), County Workers Pension Fund (2.2 percent) and Unclaimed Financial Assets Authority (1.98 percent).
The IPO had to raise at least Sh53.1 billion from more than 250 investors for it to proceed, a target that had not been achieved as the offer raced to a close.
This forced the State to urge parastatals, the State-backed pension scheme and the Ugandan government to save the IPO from collapse.
At Sh9.02, the State-owned firms sold the shares at nearly the same offer price as the listing of KPC at the Nairobi bourse.
The government priced the Kenya Pipeline IPO at Sh9 per share for the offer that opened on January 19 and ran until February 24, with the shares opening trading on the Nairobi bourse on March 9.
In the end, Uganda, together with 13 State-backed pension schemes and agencies, pumped in Sh95.8 billion of the required Sh106.3 billion, according to confidential documents seen by the Business Daily.
The offer received a 105.7 percent subscription ?rate, raising Sh112 billion against the State target of Sh106 billion.
Without the NSSF, Uganda and the pension fund, the IPO would have collapsed on failure to hit the success level.
About 90 percent of the top owners of KPC bought their shares through proxies during the firm’s IPO, keeping the identity of the investors anonymous.
Regulatory filings show that 18 of the top 20 shareholders of KPC are under nominee accounts.
Nominee accounts are registered to hold shares on behalf of the true owners, a structure used globally and at firms listed at the Nairobi bourse to mask the identity of beneficial owners.
The NSSF and the State agencies also split their stake under several nominee accounts, masking their position as KPC’s largest shareholders.
The success of the offer was dented by the apathy among foreigners, high-net-worth investors in the private sector, retail investors and oil marketers, who many believed considered Kenya Pipeline a strategic investment.
Local retail investors bought shares worth Sh4.1 billion against their allocation of Sh21.2 billion stocks, while foreigners spent a measly Sh32.7 million compared to their target of Sh21.2 billion.
Oil marketers took shares worth Sh22.9 million or 0.14 percent of the Sh15.9 billion stocks allocated to the dealers who rely on the pipeline to feed the market.
The concentration of local institutional investors and Uganda implied that the IPO was seen as a long-term strategic investment.
The KPC transaction comes after a series of large block trades at the NSE, as the bourse seeks to deepen liquidity and improve transparency around big share transfers.
The most notable was the Sh204.3 billion sale of a 15 percent stake in Safaricom by the government to Vodacom, involving 6.009 billion shares.
It was the largest single transaction ever conducted on the bourse and accounted for the bulk of equity market turnover around the time it was executed.
Diageo has also used the block-trade mechanism to increase its stake in East African Breweries (EABL), acquiring 14.97 percent of the brewer for Sh22.73 billion in 2023 and raising its total holding to 65 percent.
KPC’s net profit grew 13 percent to Sh11.58 billion in the year to June 2026, allowing the firm to splash Sh5.81 billion in dividends.