Traditional public listings

Listing in the NSE’s main market segment has historically been a key route for companies to raise funds and gain liquidity. This has been either through initial public offers (IPOs), cross-listings from foreign exchanges and listings by introduction. IPO activity has remained remarkably subdued, with only one IPO recorded in the past decade, the self-listing of the NSE itself in 2014.

This decline stems from multiple interconnected factors. The stringent regulatory and disclosure requirements imposed by the Capital Markets Authority (CMA) create significant barriers, as companies must comply with rigorous provisions under the CMA and related regulations, including extensive financial disclosures, ongoing compliance checks, and strict corporate governance standards that many private businesses view as overly burdensome.

Market conditions have also contributed to this, where despite NSE investments showing higher returns compared to government bonds as of July 2025, investors continue to favour government bonds for their greater certainty, capital preservation and reduced market volatility exposure. Global economic uncertainty and local political unrest have further dampened investor appetite for IPOs, while competition from global markets draws potential listings away, as evidenced by companies like Jumia choosing to list in the New York Stock Exchange.

The NSE responded to market needs by developing innovative and flexible public capital-raising options through specialised market segments designed to meet diverse business requirements. These alternatives include Real Estate Investment Trusts (REITs) for real estate sector players, exemplified by the in LAPTRUST IMARA I-REIT listed on the restricted sub-segment of the main market segment.

Government initiatives and market recovery efforts

In a bid to revitalise Kenya’s IPO market, President William Ruto announced plans to privatise several state-owned enterprises, including the Kenya Pipeline Company, through public listings on the NSE. Speaking at the London Stock Exchange and the Africa Debate on 2 July 2025, he stated that the Government of Kenya is committed to a structured privatisation programme as part of a broader effort to stimulate local capital markets and attract investment. 

However, the success of these initiatives will ultimately depend on broader market reforms, regulatory incentives and improved investor confidence.

Alternative public capital raising solutions

Aside from the main market segment, there are other alternative avenues through which businesses can get access to public capital through comparatively lighter regulatory requirements than listings on the main market segment. These alternatives include:

• the Alternative Investment Market Segment which serves medium-sized businesses with assets and paid-up share capital of at least KES 20 million, with successful listings including The Limuru Tea Co. Plc Ord 20.00, Williamson Tea Kenya PLC, Deacons east Africa PLC etc;
• the Fixed Income Securities Market Segment which facilitates debt instrument listings, with notable successes like East African Breweries’ 2021 corporate bond that was oversubscribed by more than three times; and
• the Growth and Enterprise Market Segment which caters specifically to small and medium-sized companies with tailored regulations, requiring only KES 10 million minimum fully paid-up share capital and no minimum working capital requirements. The Growth and Enterprise Market Segment hosts companies like Homeboyz Entertainment PLC and Nairobi Business Ventures Ltd.

The robust private capital market

Private capital through PE and VC funds continues as a vital funding source in Kenya, particularly for high-growth sectors like fintech, healthcare and renewable energy. Beyond capital access, private funding offers strategic and operational expertise, enhanced corporate governance, and subsequent funding opportunities, with investors increasingly offering structured alternatives such as convertible debt, mezzanine finance and hybrid instruments.

Despite challenges, including lengthy due diligence processes, protracted negotiations and potential strategic misalignment between investors and founders, practical solutions exist. These include streamlining due diligence through technology and digital data rooms, ensuring appropriate resourcing for expedited decision-making, and fostering early transparency in material information disclosure.

The numbers demonstrate private capital’s continued strength in the region. According to the East Africa Venture Capital Association’s 10-Year Impact Report, the East African region has recorded approximately 550 PE deals and over 1,000 VC transactions since 2013, with Kenya attracting around 60% of these deals. In terms of value, East Africa has seen cumulative inflows of about USD 5,1 billion in private equity and USD 5,5 billion in venture capital over the past decade, with Kenya receiving approximately USD 3,7 billion of the private equity share.

Regulatory evolution supporting private markets

Recognising this market strength, the CMA introduced the Alternative Investment Funds (AIF) licensing category in 2023, primarily targeting private equity, venture capital firms and hedge funds. AIFs are privately pooled collective investment schemes raising funds from a minimum of two but not more than one hundred investors for investment according to defined investment policies and may take various forms including debt-linked funds, equity funds, hedge funds, property funds and infrastructure funds.

What this means for businesses and investors

As Kenya’s capital markets continue to evolve, businesses and investors must remain open-minded and willing to explore innovative and less conventional capital raising avenues. This approach will allow them to raise capital in a manner that is aligned with their specific set of circumstances and on terms that are aligned with their current growth phase and long-term strategic goals. The comprehensive landscape of options, from traditional public listings to specialised market segments and robust private capital markets, provides multiple pathways for companies to access the capital they need while allowing investors to participate in Kenya’s economic growth story.