Dubai Taxi Company has set the final price for the offering at Dh1.85, at the top end of the previously announced offer price range, resulting in an offering size of around Dh1.2 billion ($315 million).
The company and the selling shareholder confirm the previously announced offering size consisting of a total of 624.75 million shares, equivalent to 24.99% of DTC’s total issued share capital. The offering saw tremendous demand from international and regional institutional investors and retail investors in the UAE, with total demand amounting to over Dh150 billion ($41 billion), implying an oversubscription level of 130 times in aggregate.
This represents the highest oversubscription level achieved by an IPO on the DFM, the company said in a statement.
Increases shares offered to retail investors
In response to the significant oversubscription of the UAE retail offer, the company increased the UAE retail offer has been increased to 74.97 million shares from 62.475 million shares, it said in a statement on Tuesday. The size of the retail tranche will now be between Dh135 million and Dh139 million, representing a total of 12% of the offer shares, compared to 10% previously announced.
The offering size remains unchanged at 624.75 million ordinary shares, which represents 24.99% of the company’s total issued share capital. Following the increased allocation to the UAE retail offer, the qualified investor tranche has been reduced to 549.78 million shares instead of 562.275 million shares, representing 88% of the offer shares, compared to 90% previously announced.
The subscription period for the offering remains unchanged, closing on November 28, 2023, for UAE retail investors and November 29, for qualified investors. The offering and admission is expected to be completed on December 7, 2023, subject to market conditions and obtaining relevant regulatory approvals in the UAE, including approval of admission to listing and trading on the DFM.
So far this year, Dubai is the Gulf’s best-performing market, with the benchmark index up 20%.
This year, about $8.4 billion, excluding Dubai Taxi, have been raised through regional IPOs, making up over a third of all the listing volumes in Europe, the Middle East and Africa, as per data from Bloomberg.
In 2022, Dubai earned $8.3 billion by privatising stakes in four state-owned enterprises, including the Dubai Electricity and Water Authority (DEWA). This is the first of ten state-owned companies to be listed to bolster flagging trading volumes and conform to similar initiatives in Abu Dhabi and Riyadh.
The IPO is the second major listing in Dubai this year, following the listing of Al Ansari Financial Services PJSC in March. The DTC is one of the largest taxi operators in the Middle East, with a fleet of over 12,000 taxis. The company is also a major player in the Dubai tourism industry, providing transportation for tourists and business travellers.
The proceeds from the IPO will be used to fund the DTC’s expansion plans, including the purchase of new taxis and the development of new technology. The company also plans to use the proceeds to pay down debt.
