Investec has issued a positive assessment of Cell C, indicating that the mobile operator’s share price has scope to rise following its debut on the Johannesburg Stock Exchange. The analysis comes after Cell C listed on 27 November 2025, concluding a prolonged recapitalisation process and formally separating from its former majority shareholder, Blue Label Telecoms.
The listing marked a structural shift for the company after several years of financial strain and repeated restructuring efforts. However, the initial public offering failed to attract strong demand, with the share price opening at R26.50, below the indicated range of between R29.50 and R35.50. Since listing, the shares have traded close to R30, reflecting a cautious market response despite the company’s balance sheet overhaul.
Scepticism around Cell C remains tied to its historical underperformance and debt burden, yet several major institutional investors have taken positions in the business. Allan Gray acquired a 15.54% stake, equivalent to around R1.4 billion and representing half of the available public float. Investec, which acted as joint global coordinator and financial adviser on the listing, has also expressed confidence in the company’s revised structure and operating model.
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In its research note titled “Reconnected, Buy signal”, Investec argued that market sentiment remains anchored in the company’s past difficulties rather than its current financial position. The bank pointed to the scale of the balance sheet reset and the shift towards positive free cash flow as being underappreciated by investors. It added that Cell C trades at a notable discount to listed peers, creating a margin of safety that justifies a favourable investment view, as reported by BusinessTech.
Cell C’s turnaround strategy has been driven by a comprehensive restructuring completed ahead of the listing. The process converted historical funding arrangements and inter-company exposures with Blue Label into equity, simplifying ownership and clarifying capital allocation. This resulted in a substantial change in financial standing, with negative equity of R8.3 billion replaced by positive equity of R3.5 billion. The restructuring also reduced leverage and strengthened governance independence, while maintaining a commercial relationship with The Prepaid Company as its main prepaid distribution partner.
Looking ahead, Investec’s base-case projections assume modest revenue growth of 2.6%, supported mainly by mobile virtual network operators and postpaid customers, partially offset by weaker prepaid performance. The bank expects EBITDA margins to rise to 23.5% by 2028 from 21.9% in 2025, reflecting operational efficiencies and lower financing costs. Free cash flow is forecast to grow at a compound annual rate of 24% over three years, underpinned by declining capital expenditure and a lighter tax burden.
Although free cash flow conversion is expected to improve to 73% by 2028, it is still projected to trail larger rivals such as Telkom and Vodacom. Under more optimistic assumptions, Investec estimates that Cell C could return to a net cash position in 2027. The bank noted that its projections sit at the lower end of management’s medium-term guidance, suggesting potential upside if execution improves.
On valuation, Investec set a target price of R37 per share, implying material upside from current trading levels. The assessment places Cell C among a small group of South African telecoms operators attempting to reposition themselves after years of financial pressure, at a time when mobile data demand continues to rise and network-sharing models are reshaping the competitive landscape, as noted by Reuters.