DEWA has increased its offer size to 17 percent from 6.5 percent as its IPO meets overwhelming subscriber demand.

“The new offering of 8.5 billion ordinary shares implies a deal size of 17 percent,” the Dubai utility company said in a statement.

Who gets what?

New strategic investors will receive around 7 percent of the company’s share capital (representing approximately 3.50 billion shares) with a lock-up of between 180 to 365 days.

The balance of the offered size (including ‘cornerstone investors’ who came in earlier) is up from 6.5 percent to 10 percent of the share capital.

The increase in offer size does not apply to retail investors.

The IPO was heavily over-subscribed from Day 1, with the offer opening on March 24. Retail investors had been keenly anticipating DEWA offering a higher stake – but they will not be getting any of the new shares being offered. (The retail tranche will remain unchanged at between Dh731 million to Dh806 million of the overall Dh7 billion-plus issue size.)

The hike in offer size follows approval from the UAE regulator, the Securities and Commodities Authority. DEWA “exercised its right to increase the number of shares offered” from 3.25 billion shares to 8.5 billion, which would result in a free float of 17 percent of the entity’s share capital.

The Dubai Government will own the remaining 83 percent. DEWA has also received regulator approval to increase the size of the tranche reserved for ‘qualified investors’ (which includes new ‘strategic investors) from 5.9 percent (representing up to 2.925 billion shares) to up to 16.4 percent of the company’s share capital (representing up to 8.175 billion shares).

An eye on ‘post-listing’

The higher offer size was determined by the Dubai government as the selling shareholder, following DEWA’s decision to set the offer price range per share between Dh2.25 and Dh2.48 per ordinary share on March 24. The offer period closes on April 2, and thereafter DEWA will announce the final offer price.

Source: DEWA expands IPO size to 17%, turning it into a mega listing on DFM | Markets – Gulf News