IFC Invests ZAR 350M in Boxer Retail IPO to Boost Job Creation and Food Security in SA

The IPO will help Boxer Retail execute its ambitious growth plans, which include doubling its store footprint in the next six to seven years.

The International Finance Corporation (IFC) has made a cornerstone investment of ZAR 350 million ($19.4 million) in Boxer Retail Limited’s Initial Public Offering (IPO) on the Johannesburg Stock Exchange (JSE). This strategic investment is expected to significantly contribute to job creation, particularly among low-skilled and unskilled youth, while enhancing food security for low- and middle-income populations in underserved areas across South Africa.

IFC's support played a pivotal role in encouraging further participation from both institutional and retail investors, helping Boxer’s IPO raise a total of ZAR 8.5 billion (USD 472 million). This marks the largest IPO on the JSE since 2018, underscoring the strong investor confidence in the company’s potential for growth.

The IPO will help Boxer Retail execute its ambitious growth plans, which include doubling its store footprint in the next six to seven years. The retailer aims to open 60 to 70 new stores annually, particularly in underserved rural areas and urban townships. This expansion will directly benefit low- and middle-income populations by increasing their access to affordable, high-quality food and other essentials.

Revitalizing South Africa’s Retail Landscape

The IPO also supports the recapitalization plan of Pick n Pay Stores Limited, which previously fully owned Boxer before the company’s listing. The funds raised will be used by Pick n Pay to repay part of its existing debt, contributing to its broader financial sustainability.

Marek Masojada, CEO of Boxer, emphasized the significance of the listing, stating, “This milestone provides us with access to both local and international capital markets to support our growth ambitions. We are proud to offer unbeatable value to our price-conscious customers, and our deep understanding of their needs has been key to our success.”

Job Creation and Economic Impact

IFC's investment aligns with South Africa’s national priorities, such as fostering inclusive growth and creating employment opportunities. Cláudia Conceição, IFC's Regional Director for Southern Africa, highlighted that Boxer’s expansion is expected to create approximately 20,000 new jobs over the coming years. This job creation will be a significant boost to communities, particularly in underdeveloped areas where access to employment opportunities has traditionally been limited.

Addressing South Africa's Retail Challenges

South Africa's grocery retail market is substantial, with a population of approximately 61 million people living in 18.5 million households. Despite this, many low- to middle-income communities, particularly those in urban townships, peri-urban regions, and rural areas, lack access to modern retail options. By expanding into these underserved areas, Boxer aims to fill this gap and improve access to quality and affordable retail goods.

IFC’s Continued Commitment to South Africa’s Growth

As of September 2024, the IFC has invested $3.8 billion in South Africa’s private sector and maintains an advisory portfolio worth $25.1 million, focusing on sectors such as finance, climate, construction, real estate, and electric power. This investment in Boxer Retail is in line with the World Bank Group’s strategic focus on promoting inclusive growth and job creation in South Africa, particularly for historically disadvantaged communities.

In summary, the IPO and subsequent growth of Boxer Retail will not only contribute to the retail landscape of South Africa but also foster economic resilience by creating jobs, supporting food security, and providing essential services to the country’s most vulnerable communities.