Kenya's Safaricom IPO leaves some investors bitter

By Duncan Miriri

NAIROBI, June 18 (Reuters) - East Africa's biggest initial public offering was hailed as a huge success after massive oversubscription in Kenyan mobile company Safaricom (SCOM.NR) and a 50 percent share price rise on its debut.

But for many of the country's growing legion of small investors, it was a big disappointment after they received just 21-31 percent of the shares they had applied for.

Thousands of those small investors took bank loans, hoping to cash in on the issue, which attracted 236 billion Kenya shillings ($3.68 billion) worth of applications against a target of 50 billion.

"I actually lost 4,000 shillings ($62) which the bank was charging to process loan applications," said Wanja Ngure, a 27-year-old social worker who borrowed 200,000 shillings to invest.

Kenya's government sold 25 percent of its 60 percent stake in Safaricom. The rest is owned by a consortium led by Britain's Vodafone (VOD.L).

Like other Kenyans who borrowed heavily to take part, Ngure is now feeling the pain of her loan repayments.

At the height of the IPO fever in April, banks paid for prominent, flashy adverts offering financing for the shares.

Details of the total amount they loaned to investors were not immediately available, but the East African newspaper put it at 20 billion shillings.