UAE’s first IPO of 2024 has reportedly pulled in record retail over-subscription
Dubai: As was widely anticipated, the retail part of the Parkin IPO has been raised, from 10 per cent to 12 percent, with the Dubai company confirming an ‘exceptional level of over-subscription’. The retail subscription closed on Tuesday (March 12).
The overall size of the IPO remains at 24.9 per cent. Each investor will be assigned a minimum of 2,000 shares. (But the actual tally of minimum shares will be decided once the full extent of the over-subscription numbers are tallied.)
The IPO will close today with the subscriptions raised from professional investors. Parkin is the UAE’s first stock market float of the year, and based on banking and market analysts, the issue was met with instant demand from investors, retail and professional. And based on feedback, a fairly heavy investor interest from overseas too.
The market is already factoring in an over-subscription of well over 100 times for Parkin, led, of course, by the retail demand that had been building up for over 3 months, right from the time the RTA entity was made into a full-fledged company.
How much more can retail investors get?
Based on the IPO price range of Dh2 to Dh2.10 a share, the retail tranche will now be between Dh179.93 million and Dh188.92 million.
The total IPO size is unchanged at 749.7 million shares – or 24.99 per cent of total issued share capital. Following the increased allocation to the UAE retail offer, that for professional investors will be 659.73 million shares, instead of 674.73 million. This 88 per cent of the offered shares, compared to 90 per cent before.
This was the same strategy followed by another RTA entity that went for a stock offering – Dubai Taxi Co., which raised the retail tranche but kept overall size of the IPO at 24.9 per cent. (The other RTA entity, Salik, too divested
“The increase in retail allocation has now become a consistent pattern by UAE issuers, including those from RTA spinoffs, as they have seen the appetite from retail investors,” said Sameer Lakhani, Managing Director of Global Capital Partners. “This trend will continue as the number of new retail investors ratchets up in the domestic capital markets.”
The Parkin listing is scheduled for March 21.
PARKIN’S P/E
A key investor metric, the price-to-earnings for Parkin comes in at around the 16 mark, if the share price is set at Dh2.1. International companies operating in the same space, the P/E is at a discount of 30. For listed parking space operators in the US, it’s around 22.
Sameer Lakhani
The writer is Managing Director of Global Capital Partners.
