Dubai: The Dh1.6 billion ($435.5 million) IPO of the Dubai Financial Market (DFM) has been oversubscribed 300 times and has raised about Dh190 billion, the exchange said in a statement yesterday.
Excess funds from the initial public share offer, which opened on November 12 and closed on November 23, will be returned from December 10, the statement said.
The strong response to the DFM offer follows a trend in line with UAE IPOs over the past more than two years, where attractively priced shares attracted huge oversubscriptions.
Earlier this year, du's Dh2.4 billion IPO was oversubscribed 167 times and Tamweel's Dh550 million offering received 485 times that amount.
Last year, Dana Gas' Dh2.06 billion IPO was oversubscribed 140 times and raised nearly Dh288 billion, while Aabar Petroleum received 800 times as much from its Dh475 million offering.
"The extremely positive investor response to the IPO is an indication of their trust in the DFM, its future growth potential and market leadership status," Eisa Kazim, DFM's director general, said in the statement.
Offer price
At its offer price of Dh1 per share, the DFM IPO is priced at a price-earnings multiple of 6.38 to its 2005 earnings and 9.88 times to its forecast 2007 earnings. The overall market trades at a trailing price-earnings multiple of nearly 14.
Analysts expect DFM's share to list at a price of Dh1.50 to Dh3.
DFM, which provides listing, trade execution, clearing, settlement and information services, lists 44 companies, six bonds and sukuks, and 11 mutual funds. The market has a network of 93 brokers.
DFM, which offered 20 per cent of its equity to the public at a price of Dh1, reported a net profit of Dh1.253 billion in 2005 on total revenues of Dh1.289 billion.
Companies in the six-nation Gulf Cooperation Council are expected to raise more than $8 billion through IPOs in 2006, which have been oversubscribed an average of 47 times in the first nine months of the year.
