Dubai: The Tecom Group IPO – with the share price set at Dh2.67 – recorded Dh35.4 billion in subscriptions, indicating strong retail and institutional demand. The retail investor interest was exceptionally strong, with Tecom’s announcement of a likely Dh800 million a year dividend payout for the first three years as being particularly attractive.
The retail component hit an oversubscription of nearly 40 times in aggregate.
“We are incredibly proud to have received the highest ever oversubscription multiple in the retail tranches for an IPO on the DFM, demonstrating the trust that this important investor base has in TECOM Group as an investment,” said Malek Al Malek, Chairman of Tecom Group. “It is also a strong validation of the company’s reputable market position as a strategic enabler of knowledge-based sectors in the emirate.”
The offer will see 625 million shares in the company pass onto individual and institutional investors’ hands. Tecom did not opt to go for raising the issue size, though some analysts had suggested this to be likely. In all, 12.5 per cent of the issued share capital was offered, with the listing date on DFM to be ‘on or around’ July 5. The company will then have an implied market capitalization of Dh13.4 billion.
“The tremendous demand we drew both locally and internationally for the Tecom Group IPO, especially amid challenging market conditions, is testament to the company’s appealing value proposition and growth prospects,” said Al Malek. “Investors’ strong appetite is underpinned by their optimism toward Dubai’s economy and confidence in the emirate’s capital markets.”
On Monday, the DFM is treading positive, following other Asian markets, by gaining 34 points, with Emirates NBD, Emaar, DEWA, and DIB in the green.
Tecom Group’s final offer price of Dh2.67 a share is at the top of the price range. The company has thus raised Dh1.7 billion through the IPO.
The UAE retail offer had the ‘highest oversubscription multiple ever for IPOs on the DFM’, with an oversubscription level of nearly 40 times in aggregate.
The global offer had total gross demand of Dh35.4 billion, implying an over-subscription level of over 21 times in aggregate at the final price of Dh2.67 a share.