Kiharu MP Ndindi Nyoro sold 11.78 million shares or 36 per cent of the shares he owned in Kenya Power between June and December 2023, cutting his directly held stake in the utility to 20.72 million units, the latest regulatory filings seen by the Business Daily show.
Mr Nyoro’s present stake of 1.06 percent in the utility is now worth Sh29 million, going by Kenya Power’s closing price of Sh1.40 per share on Monday. The value of the shares ceded by the MP in the half-year period stands at Sh16.5 million, at the current price.
On June 30, 2023, when his CDS (stock market) account was listed as holding 32.5 million shares, the stake was valued at Sh51.35 million at the prevailing price of Sh1.58.
The lawmaker had built up his holding in the power firm by 5.2 million shares in the year leading up to June 2023, making him the single-largest individual shareholder at the time.
He has now dropped into second place, behind Naran Khimji Hirani and Virji Khimji Hirani, who jointly hold 23.85 million shares in Kenya Power, equivalent to a 1.22 percent stake.
Mr Nyoro, who chairs the Budget and Appropriations Committee in the National Assembly, said in 2022 that he started his investment journey in the equity market as a first-year student at Kenyatta University.
Collectively, individual shareholders from Kenya and the East African Community (EAC) hold 605.9 million Kenya Power shares worth Sh848.3 million, equivalent to a 31.05 percent stake in the firm.
EAC-based institutional investors, who include the Kenyan government, together hold a stake of 1.26 billion shares (64.36 percent) valued at Sh1.76 billion. The remaining 89.58 million shares (4.6 percent) are in the hands of foreign investors.
Kenya Power’s stock is among those at the Nairobi Securities Exchange (NSE) that are seen as undervalued by analysts, with a price-to-book (P/B) ratio of 0.78, making it attractive to long-term investors willing to wait out the prolonged bear run at the bourse.
The company’s share price has fallen by 12.9 percent since the end of June 2023, putting its market capitalisation at Sh2.73 billion.
Its net assets are valued at Sh56.8 billion as per the company’s latest financial report for the year ended June 2023. Despite the major undervaluation, investors have been unable to realise gains from potential catalysts such as cash distributions from asset sales, a phenomenon that plagues other State-owned firms such as KenGen.
The utility reported a Sh3.19 billion net loss in the year to June 2023, after taking a hit from a sharp rise in financing costs on its hard currency obligations due to the weakening of the shilling.
The company said it could have reported a net profit of Sh3.26 billion in the period, but the 89 percent jump in the financing costs to Sh24 billion from Sh12.9 billion previously hurt its bottom line, despite a 12 percent rise in operating profit to Sh19.2 billion.
Kenya Power is one of the largest corporate consumers of foreign currency in the country, requiring between $45 million and $50 million, and €18 million and €20 million per month to settle obligations, mainly to independent power producers.
