UAE IPO pipeline to remain strong as some big names likely to go public in 2025

Vijay Valecha, Khaleej Times, December 26, 2024

The initial public offering (IPO) pipeline looks healthy for the next year after seven UAE companies raised $6 billion (Dh22 billion) this year.

Analysts say some of the big industry players such as Abu Dhabi’s National carrier Etihad Airways, UAE's largest online classifieds platform Dubizzle, hospitality firm Five Holdings and IT firm Alpha Data could potentially go public in 2025.

The seven companies that went public in 2024 are Talabat, Lulu Retail, ADNH Catering, NMDC Energy, Alef Education, Spinneys and Parkin.

“Talabat and Lulu led the pack in terms of deal size, bringing in $3.7 billion, accounting for about half of the total IPO proceeds raised in 2024. The overall deal value is about the same as last year’s $6 billion number. However, eight IPOs were listed in 2023 against seven in 2024. This points towards the continuation of the ongoing IPO season's bullish momentum,” said Vijay Valecha, Chief Investment Officer, Century Financial.

The standout year, however, was 2022, which witnessed 11 IPOs, generating a staggering $13 billion in proceeds – double the total of 2023 and 2024 put together. They have delivered an impressive 37 per cent average return to date from their respective offer price, said Century Financial.

Upcoming IPOs

According to Century Financial, one potential 2025 IPO candidate is Abu Dhabi's Etihad Airways, poised to become the first Gulf airline to go public. Another prospect is Dubizzle, the UAE's largest online classifieds platform. Having undergone rapid growth, the company could tap into investor interest in digital marketplaces, aligning with the UAE’s push for tech-driven IPOs. The IPO is estimated to be $500 million to $1 billion.

“If history is any guide, 2025 IPO listings in the UAE could potentially hit $6 billion, similar to the attention garnered in 2023 and 2024, where listings also raised around $6 billion,” added Valecha.

George Pavel, general manager at Naga.com Middle East, said the technology sector, particularly companies focused on artificial intelligence (AI), healthtech and fintech, could see potential IPOs given the UAE's push to become a global tech hub.

“State-owned enterprises across energy, infrastructure, and utility sectors might also go public as part of the government's economic strategy. The favourable economic conditions, including strong projected GDP growth and potentially less geopolitical tensions in the region impacting sentiment, create an attractive environment for companies considering IPOs in 2025,” added Pavel.

Pavel expects UAE companies could potentially raise approximately $3.7 billion to $4.2 billion for the currently announced companies, while additional IPOs could be declared later.

“Five Holdings, a Dubai-based luxury hotel operator, is eyeing a significant IPO that could raise up to $2 billion. Etihad Airways, under ADQ's ownership, is planning to raise up to $1 billion from its planned listing, which is expected no sooner than 2025. Dubizzle Group, having achieved unicorn status after securing $200 million in funding in 2022, is targeting an IPO value between $500 million and $1 billion. Alpha Data's potential IPO is estimated at around $200 million. These announced IPOs suggest 2025 could be a significant year for UAE capital markets,” added Pavel.

Why subscribe to IPOs in 2025?

Over the past three years, 16 out of 26 IPOs – or 61 per cent of the companies – that were listed on the Dubai Financial Market and Abu Dhabi Securities Exchange are trading in positive territory. Meanwhile, in 2024, three of the seven newly listed companies, NMDC Energy, Spinneys, and Parkin, have posted gains and are in the green at the end of last week.

Valecha added that the UAE’s IPO market presents an opportunity for retail investors in 2025, supported by the nation’s strong economic diversification and thriving capital markets.

“Markets like the ADX and DFM have delivered impressive returns, with the ADSMI Index up nearly 83 per cent over five years, while the DFMGI Index has returned 21 per cent over the past year and 57 per cent over three years. Moreover, the UAE’s political and economic stability has also attracted significant foreign investor interest, further boosting liquidity and market strength. Upcoming IPOs in 2025 are likely to benefit from this momentum,” he added.

Source

Khaleej Times