JOHANNESBURG (Reuters) – Africa’s biggest pay-TV group MultiChoice debuted on the Johannesburg Stock Exchange on Wednesday with shares opening at 95.50 rand, giving the company a market capitalisation of 42 billion rand ($3.03 billion).

South African ecommerce giant Naspers decided to spin off MultiChoice after coming under pressure in recent years to find ways to narrow a valuation discount between its market value and that of its one-third stake in Chinese internet group Tencent.

As of 0727 GMT, the stock was trading at 105.04 rand, adding to opening gains.

Naspers did not raise any money from the listing with the 439 million shares instead being distributed to current Naspers shareholders on a one-for-one basis for its listed shares and one for five unlisted A class shares

Founded 30 years ago, MultiChoice reaches around 14 million households in 50 African countries, offering both paid-TV products and a fledging streaming service called Showmax.

The company has said there are more than 25 million households across the continent yet to be captured by its traditional pay-TV business.

The spin off leaves MultiChoice — whose strong cash flow helped Naspers evolve into one world’s biggest players in e-commerce – free to fend for itself in an increasingly competitive market where Netflix is already supplying viewers with TV content and Hollywood hits.

“This is a momentous time for our business… This marks the next chapter in our development and growth,” said MultiChoice CEO Calvo Mawela.

($1 = 13.8603 rand)

Reporting by Emma Rumney; editing by Alexandra Zavis and Jason Neely