Khaleej Times - Dubai: Salik IPO expected to see a strong response

Vijay Valecha, Special to Khaleej Times September 06, 2022

Dubai toll operator Salik’s initial public offering (IPO) is expected to see a strong response and shareholders will enjoy steady dividends, says an analyst.

“Firms like Dubai Electricity and Water Authority (Dewa) and Salik are high-quality government utility companies with a steady stream of revenues, thus enabling the exchange to attract investments from international investors. Moreover, in the current uncertain global macro-environment, Salik kind of companies could get the attention of income investors looking for less aggressive bets,” said Vijay Valecha, Chief Investment Officer, Century Financial.

Salik will sell 1.5 billion shares or 20 per cent of the stake through IPO this month and list shares on the Dubai Financial Market. This will be the third public offering by the public entity. In April, the Dubai Electricity and Water Authority (Dewa) was the first public entity to raise $6.1 billion in its IPO. In June, business park operator Tecom raised Dh1.7 billion through the IPO.

Additionally, Valecha said Salik has “grown by leaps and bounds during the past two decades.”

He added: “The relative peace in the Emirate has made it a favourite of high-net-worth individuals from across the globe. Furthermore, the friendly nature of the administration has enabled it to lure talent from around the world. With the population expected to rise with the arrival of new residential and commercial supplies, the future of Salik looks good. So even though global conditions are harsh, we expect the IPO to be oversubscribed in large numbers,” he added.

Century Financial CIO said being the only toll operator in Dubai, Salik is safe from income volatility, hence, it can be a good alternative for investors who have parked their funds in low-yielding bonds.

“In these tumultuous market conditions, investors who had their assets in dividend-paying stocks have been assured of some income. Salik is a similar investment, and shareholders can enjoy steady dividends irrespective of the market conditions,” he added.