Nigerian billionaire Aliko Dangote's refinery stake could be worth $55 billion

Nigerian billionaire Aliko Dangote's stake in his oil refinery would be worth about $55.1 billion at a new valuation from Renaissance Capital, roughly $13.8 billion more than the same holding is worth at the price the company is charging investors in its initial public offering.

Renaissance Capital raised its estimate of the value of Dangote Petroleum Refinery and Petrochemicals FZE to ₦700.41 a share in a note dated Oct. 16, up 13.1% from ₦619.47. The new figure is 33.4% above the ₦525 offer price. "The result is an upward revision of DCF value by 13.1% to NGN700.41/share, 33.4% above the NGN525 offer price," the firm said, referring to its discounted cash flow model.

Dangote, Africa's richest person, holds 87.27% of the refinery, or 104.83 billion of its 120.13 billion shares, through Dangote Oil Refining Co., Dangote Industries Ltd., Cayman Islands-registered Greenview International Corp. and a 60% interest in Salamad Ventures Ltd., according to the IPO prospectus.

At ₦525 a share, that block is worth ₦55 trillion ($41.3 billion). At Renaissance Capital's ₦700.41, it rises to ₦73.4 trillion ($55.1 billion). Renaissance Capital puts the value of the whole company at about $63 billion before the new shares are issued.

Why the analysts raised the price

The upgrade follows results that beat the firm's forecasts. The refinery made a net profit of $4.73 billion in the first nine months of 2026, compared with a loss of $117.2 million a year earlier. Revenue jumped 144.5% to $22.48 billion, and earnings before interest, tax, depreciation and amortization reached $5.52 billion, against Renaissance Capital's forecast of $4.10 billion. The company swung to net cash of $650.8 million from net debt of $1.73 billion.

Third-quarter EBITDA of $2.92 billion came in 94.8% above the firm's estimate, as fuel margins widened. The note was titled "Stronger refining margins drive earnings outperformance."

Renaissance Capital raised its 2026 forecast for the refinery's gross refining margin to $35.81 a barrel from $27.55, and lifted its full-year EBITDA estimate by 34.6% to $7.24 billion. It said only about 8.5% of the increase in its share value came from the higher 2026 forecasts. The rest reflected the company's net cash, a later valuation date and changes in exchange-rate and discount-rate assumptions.

The firm expects profit to slow in the fourth quarter, forecasting EBITDA of $1.72 billion, 41% below the third quarter, as refining margins ease. It called the Middle East conflict the largest swing factor for margins and named taxation and the naira as other key risks. Each 1% move in the currency changes its valuation by about ₦7 a share, and terminal value accounts for 72.1% of its estimate of enterprise value.

Its base case assumes the refinery's second processing train starts in January 2030, doubling capacity to about 1.4 million barrels a day from roughly 700,000. Management is aiming for 2029, with about $14.3 billion of expansion spending. A 2029 start would lift Renaissance Capital's value to ₦731.80 a share, while a delay to 2031 would cut it to ₦671.83.

Split views on the price

Analysts remain divided on the offer. GTI Research put the refinery's fair value at about ₦493 a share in September and called the IPO "FULLY VALUED," citing crude supply, currency mismatches and the risks of the expansion. CardinalStone Research and Chapel Hill Denham have valued the company at between ₦77.7 trillion and ₦82.62 trillion, above the ₦63.07 trillion implied by the offer price.

Adjusted for the ₦2.11 trillion of net proceeds the IPO is expected to raise and the 4.1 billion new shares, Renaissance Capital values the stock at ₦694.28, 32.2% above the offer price. Dangote's stake would fall to about 84.4% if the base offer is fully sold.

The refinery is selling 4.1 billion shares at ₦525 each to raise about ₦2.15 trillion ($1.62 billion), the largest IPO in Nigeria's history, with an option to sell 30% more if demand allows. The offer opened on Sept. 14 and was due to close on Oct. 13 before the Securities and Exchange Commission approved an extension to Oct. 27, to give investors elsewhere in Africa more time to sign up. The shares will list on the Nigerian Exchange, with trading expected to begin in December.