direct public offering
Direct Public Offering is when a company sells its shares straight to ordinary investors without hiring an investment bank to run the process.
In plain English
Every Nigerian who has ever bought garri from a market woman instead of a supermarket knows the appeal of cutting out the middle person and dealing with the source directly.
A Direct Public Offering works on that same instinct. Instead of paying an investment bank huge fees to package, market and sell its shares to the public, a company simply offers those shares directly to investors itself, often through its own website or a platform it sets up for the purpose.
This is different from the usual Initial Public Offering you hear about on the Nigerian Exchange, where banks like Stanbic IBTC or Chapel Hill Denham act as go betweens, deciding the price, finding buyers and taking a cut for their trouble. In a Direct Public Offering, the company keeps more control and more money, but it also carries more of the risk, because there is no bank guaranteeing that the shares will sell.
Small and growing businesses often like this route because it saves cost. A Nigerian agritech startup that has built a loyal community of customers and small investors might choose to sell shares directly to them rather than paying millions in banking fees it does not yet have.
In the United Kingdom, some companies have used similar direct offering platforms to let everyday people, more than big institutional investors, buy in early, which has made investing feel less like a closed club and more like something anyone with a few hundred pounds can join.
A Lagos based renewable energy company decides to raise ₦200,000,000 by offering shares directly to its customers and community investors at ₦50 per share, rather than going through a bank led Initial Public Offering that would have cost it millions in fees.
Questions people ask
Is a Direct Public Offering the same as an IPO?
No. Both involve selling shares to the public for the first time, but an IPO usually involves an investment bank managing the process, while a Direct Public Offering lets the company sell shares straight to investors without that middle party.
Can any Nigerian company do a Direct Public Offering?
In theory yes, but it still needs to follow Securities and Exchange Commission rules on disclosure and investor protection. The savings come from cutting out banking fees, not from skipping regulation.
Why would a company avoid using a bank to sell its shares?
Mainly to save on fees and keep more control over pricing and who gets to invest, though it means the company must handle its own marketing and investor outreach without professional backing.
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