DIGI, the Romanian telecom group, is considering listing its Spanish business on the Madrid Stock Exchange via an IPO. To that end, it has hired the investment bank Rothschild as an adviser to evaluate whether this route is viable. The valuation being discussed for its Spanish operations is approximately €2.5 billion.
Background
To understand why DIGI might be seriously considering this move, here are some of the recent developments:
1. Strong Growth in Spain
- DIGI has acquired assets from Orange and MásMóvil in Spain, which accelerated its customer growth.
- Currently, it serves about 9.6 million customers in Spain.
2. Infrastructure Investment
- DIGI is making large investments in Spain, both in fibre networks (fibre-to-the-home, FTTH) and mobile network infrastructure.
- It plans to invest around €2 billion between 2024–2030 to expand its fibre footprint and mobile network.
3. Strategic Moves
- Earlier, DIGI sold part of its fibre network in Spain to a consortium (including Macquarie, abrdn, and Arjun) for ~€750 million. The buyer operates under the Onivia brand as an independent wholesale fibre provider.
- Proceeds from that deal are being reinvested in Spain.
- Implications of an IPO
If DIGI proceeds with the IPO of its Spanish operations, there are several potential effects and challenges:
Positives
• Capital Raising: It could raise substantial funds, which can be reinvested into further network expansion and technology upgrades.
• Valuation Unlocking: Listing the Spanish arm separately might allow the market to better recognize and value its growth, potentially resulting in a premium.
• Strategic Focus: It may increase transparency and allow investors to more clearly see the performance and potential of its Spanish business, independent of its operations in other countries.
Challenges
• Regulatory Risks: The telecom sector is heavily regulated. Spectrum rights, regulation of infrastructure sharing, wholesale vs retail obligations may all complicate the business.
• Market Conditions: The success of an IPO depends heavily on market sentiment, interest rates, valuations in telecom & infrastructure, and broader economic conditions in Spain/Europe.
• Execution Risk: Transforming part of a business into a stand-alone public company involves many legal, financial, and operational changes (e.g., separate reporting, governance, structuring).
What’s Next
• Whether DIGI & Rothschild confirm the exploratory discussions. As of current reports, nobody has made official statements.
• The timeline: some sources expect the IPO could happen in 2026.
• The precise structure of the IPO: whether it will be a spin-off, a carve-out, or a full listing of the Spanish business.
• How much of the Spanish entity will be offered vs. retained by DIGI (i.e., what percentage will be floated)?
• Reaction from investors and competitors. Spain has been experiencing consolidation in the telecom sector (e.g., the Orange–MásMóvil merger), and regulatory oversight will be keen.
DIGI’s hiring of Rothschild and the discussions about a possible IPO in Madrid reflect its confidence in the growth and potential of its Spanish operations. With solid customer base expansion, major investments already underway, and recent asset deals, the Spanish arm seems to be strong enough that unlocking value through an IPO makes sense. However, whether it will happen depends on execution, regulatory environment, and market timing.
