SGTM’s Record-Breaking IPO: 5.04 Bn MAD Raised Amid 34× Demand, Strong Financials & Big Risks

The Société Générale des Travaux du Maroc (SGTM) IPO marks a watershed moment for Morocco’s financial markets. The operation raises MAD 5.04 billion ($ ~ 540 million), reflecting a sale of 12 million shares, or 20% of equity, entirely via secondary shares from the Kabbaj family. It stands as the largest capital‐market transaction in nearly 20 years, topped only by Maroc Telecom’s 2004 IPO, underscoring both the scale of domestic institutional ambition and rising investor confidence. [1][3][6]

The demand metrics speak volumes: 173,000 subscribers with MAD 171 billion in bids—roughly 34× the shares for sale. Such oversubscription is not just a numerical record; it signals deep retail engagement, strong institutional belief, and perhaps little local supply of comparable opportunities. This points toward a maturing equity culture and improved trust in corporate and market governance.[9]

SGTM’s business fundamentals are solid. Revenue is projected at MAD 14.3 billion for 2025, up from ~MAD 11.1 billion in 2024, with expectations of mid‐to‐high single‐digit growth through 2031. EBITDA margins around 16.9 % and net margins near 9 % are supported by a large order backlog (~MAD 37 billion) that covers most of 2025’s revenue and meaningful portions beyond. Balance sheet strength is improving—net financial debt down substantially, with gearing falling. [3][6][7]

Strategically, the IPO serves multiple purposes: institutionalizing governance (including board representation, independent directors, and oversight committees), enhancing transparency, enabling future capital raises or partnerships, improving visibility both domestically and across Africa, and aligning with Morocco’s surge in public investment (including infrastructure for World Cup 2030). [1][6][7]

However, risks and open issues remain. Can SGTM sustain margins under increased competitive pressure, especially in foreign markets with different regulatory, political, and financing risks? Execution risk looms large given the complexity of large EPC (Engineering, Procurement, Construction) projects, supply chain volatility, and the high capital intensity of equipment‐laden operations. Valuation at MAD 420 per share appears conservative compared to peer benchmarks and discounted cash flow models (which suggest a higher value); thus, market expectations will be tested in early trading. [7][3]