The Tecom Group IPO has been priced between Dh2.46 to Dh2.67 a share, setting up a market cap of Dh12.3 billion to Dh13.4 billion. The price range is on the higher side of analyst estimates. The final offer price will be determined through a book-building process and could be announced on June 27.
The IPO subscription phase starts today (June 16) and continues until June 23 for retail investors, while qualified investors have until June 24 to put in their requests. Ahead of the opening, Tecom confirmed two cornerstone investors – UAE Strategic Investment Fund and Shamal Holding – with a combined commitment of Dh283.75 million.
Telecom, which earlier announced that it expects to pay Dh800 million a year as dividends, operates the Dubai Internet and Media cities, as well as Dubai Design District, Dubai Industrial City, and Dubai Science Park. The 10 district hubs under its umbrella represent one of the biggest commercial real estate holdings in the emirate.
The listing on DFM is scheduled for July 5, and represents the second of the 10 IPOs of Dubai government-owned enterprises lining up to go public. DEWA, the utility company, was the first off the blocks, while on Wednesday Dubai confirmed the formation of a company to oversee its ‘Salik’ operations ahead of a potential listing.
Based on the issue size and other details announced earlier, Tecom represents a dividend yield of 6-6.5 percent, which is on par with the one from Borouge in Abu Dhabi and higher than what DEWA offered. The Tecom Group IPO will be split into:
• A total of 625 million shares, which is equivalent to 12.5 percent issued share capital, will be offered.
• DHAM LLC (Dubai Holding Asset Management), which is the selling shareholder, has the right to amend the size of the Global Offering at any time prior to the end of the subscription period.
• The total offer size will likely be between Dh1.5 billion and Dh1.7 billion, which would set up a market cap upon listing of Dh12.3 billion and Dh13.4 billion.
Synced to Dubai property
As an entity linked closely to the Dubai property market dynamics, Tecom’s IPO should be garnering quite a bit of interest, analysts say. The Dubai real estate sector, starting with residential and now extending to offices too, is going through a sharp upturn after a near 5-year decline in property values and rentals.
Tecom’s free zones keep attracting the big ones, such as Meta, Microsoft, Google, and Visa for regional HQs. Its start-up vibes too are garnering attention among prospective tenants.
Key investors
The two cornerstone investors will have a 180-day lock-in on their exposures.
• The UAE Strategic Investment Fund is a segregated portfolio of Emirates NBD AM SPC managed by Emirates NBD Asset Management. It is one of the ‘largest and longest established’ asset managers in the Middle East with a track record of investing in listed equities within the MENA region via segregated mandates and mutual funds.
• Shamal Holding is a Dubai-based investment firm with a portfolio ‘strategically aligned with Dubai’s economic growth ambitions.
WHO CAN BUY INTO TECOM?
* Individual investors and eligible employees of Dubai Holding Group as part of the IPO’s UAE retail offer; and
* Professional and other investors in a number of countries, including in the UAE, as part of the qualified institutional offering.