Khaleej Times - Dubai: Al Ansari exchange completes IPO, raising Dh773 million

The initial public offering of Al Ansari Financial Services is a trailblazer for family-owned businesses in the country, experts said.

“Al Ansari is a family-owned business. Its success is a very encouraging sign for such companies to come to the market,” Mohammad Ali Yasin, capital markets expert and adviser, told Khaleej Times in an interview as the company successfully priced its IPO.

Al Ansari Financial Services IPO drew record bids worth Dh12.7 billion, including a Dh200 million commitment from anchor investor National Bonds Corp. Even without this corner store investor commitment, the IPO issue, which closed on Friday, was oversubscribed 22 times. Such was the demand that the retail quote was oversubscribed 44 times, with its offer size raised from 5 per cent to 7.5 per cent of the total offer size. The company has set the final share price at Dh1.03, implying a market cap of Dh7.7 billion at listing.

With a 7.80 per cent to 8.00 per cent dividend yield, the company expects to distribute a minimum dividend of Dh600 million for the current year. “With this yield, Al Ansari would be in the top 4 companies in the DFM index ranked by dividend yield. The National General Insurance Company offers the highest dividend yield (TTM 12 M) of 10.27 per cent,” Vijay Valecha, Chief Investment Officer, Century Financial, told Khaleej Times

The qualified investor offering drew more than Dh10.2 billion in orders, including the Dh200 million commitment from National Bonds. Excluding the cornerstone tranche, qualified investor books were more than 19 times covered. The qualified investor offering saw strong demand from both international and regional investors, with a good representation from the UAE, Saudi Arabia and other GCC countries, highlighting the strong brand recognition of the Group across the GCC region.

The UAE Retail Offer drew significant demand with more than Dh2.5 billion in orders, and the total number of applications through the Receiving Banks and DFM’s online platform reaching almost 15 thousand. In response to the overwhelming demand from retail investors, as previously announced, the selling shareholder, Al Ansari Holding exercised its right to increase the allotment to the UAE Retail Offer to 56.25 million shares, which represents 7.5 per cent of the total number of shares on offer.

Mohammad Ali Al Ansari, Chairman of Al Ansari Financial Services, said: “The remarkable investor interest we drew from across the UAE, regional and international investors demonstrates the strong brand reputation that Al Ansari Financial Services has built over its long and rich history. It is also a testament to the attractiveness of the UAE and wider GCC economies and the investment community’s confidence in Dubai’s public equity markets and the DFM.”

Rashed Ali Al Ansari, Group Chief Executive Officer of Al Ansari Financial Services, said: “Through this IPO and as a publicly listed company, we are offering investors an opportunity to be part of a business that has significant growth opportunities driven by the UAE and other GCC countries’ favourable macroeconomic and industry trends. At the same time, the Group plans to reward its shareholders through generous dividend distributions, as defined in our dividend policy.”

Middle East IPOs raised over $ 23 billion last year, representing almost a 205 % growth over 2021. The overall activity in the Middle East primary markets continues to buck the broader decline in global IPO markets. In addition, Saudi Arabia and UAE’s growing exposure to tourism will only cement the Middle East position more vital in the global IPO market.

The timing of the IPO is crucial given the current global market turmoil, Yasin said. “It came at a very difficult time when we were living through a crisis in the banking sector in the USA and Europe. And there were worries that this would negatively affect companies in the financial sector, which Al Ansari is. But it didn’t and we saw the result,” Yasin said.

The strong response to the IPO is also evidence the high investor appetite in the region. “It is very positive for the UAE markets to have two IPOs of companies with values of around $2b each within two weeks of each other and being able to raise this liquidity. That is a very strong sign that investors are prepared to participate in IPOs if the story is good. Investors will see UAE and particular and GCC in general as a safe haven market for their investments,” he added.