Abu Dhabi: In what will be the first initial public offering (IPO) in the UAE in more than two and a half years, the Dh66 million IPO of Insurance House will open for subscription today, the company's principle founder Finance House said on Saturday.
The IPO, which closes on March 9, consists of 55 per cent of the company's authorised share capital of Dh120 million. The founder's share of capital of Dh54 million (or 45 per cent of capital) has been subscribed with Finance House taking 36 per cent of the company. The share price has been set at Dh1.00 per offer share with subscription fee of 3.5 fils per share. Insurance House shares are to be listed on the Abu Dhabi Securities Exchange (ADX) at a later stage,
"It's a small IPO that has a good chance of oversubscription. The success of the IPO will be critical to the recovery of the equity markets in the UAE," Mohammad Ali Yasin, Chief Investment Officer at CAPM Investment, told Gulf News by telephone.
UAE nationals, private and public entities, and federal and local governmental agencies can apply for a minimum of 25,000 shares, and additional shares can be applied for in multiples of 5,000.
The allotment will be on a pro-rata basis, and the allotment and refund date has been set on March 23, whereby investors, and for the first time in the UAE, will be earning interest on their oversubscribed amount.
Foreign ownership
"Once listed, the company will immediately open up its shareholding to foreign ownership, to the extent of 20 per cent of the company's paid-up equity share capital," said Finance House.
The IPO adviser is FH Capital, the wholly owned DIFC-based investment banking subsidiary of Finance House.
Insurance House has appointed Mashreq Bank as the lead receiving bank, with the participation of the National Bank of Abu Dhabi (NBAD), National Bank of Fujairah (NBF) and Finance House (FH) as receiving banks.
Rami Sidani, head of Middle East and North Africa (Mena) Portfolio Management at Schroders, told Gulf News previously that "there will be an appetite for any good company that comes to the market with reasonable valuations."
As many as five companies in the UAE may sell shares to the public this year, including an insurer that may list in the first quarter, Abdullah Al Turaifi, chief executive officer of the Emirates Securities and Commodities Authority (SCA) said last month.
The sales would mark a revival of IPOs in the country after the global financial crisis prompted companies to refrain from listing their shares in 2010.
