Dubai decides to raise Salik IPO size to 24.9% after record retail investor demand

Dubai: The size of the Salik IPO has been increased to 24.9 per cent from 20 per cent, a move that was widely expected after the public offer reportedly hit over-subscription within hours on opening day.

Investors who participated in the UAE Retail Offer will be notified of their allocation of shares via SMS on September 26. The listing is likely to be on September 29.

Salik had opened subscriptions at Dh2 a share on September 13, and based on market chatter, the IPO rode immediately into ‘over-subscribed mode’. The company, which comes under Dubai’s Department of Finance, thus exercised its right to widen the offer size.

“It was a given this would happen, and raising it to 24.9 per cent is quite generous,” said an analyst.

So, from offering 1.5 billion shares earlier, this is now 1.867 billion, with the Dubai Government owning 75.1 per cent of the equity capital. At the time of the offer opening, Salik had confirmed four cornerstone investors.

Of the three Dubai owned enterprises to have gone public, DEWA too had raised the issue size while Tecom retained the original offer.

"The new offering size was determined by the selling shareholder, following Salik’s decision to set the offer price at Dh2 per share on 13 September 2022, providing investors with a highly attractive value proposition," said a statement. "The decision reflected Salik’s prioritization of supporting after-market trading performance post-listing."

This is how the additional shares will be split

The first (retail investor) and third (eligible employees) tranches will increase from 120 million shares to 145.72 million (around 7.8 per cent of the offer size) whilst the second tranche (qualified investors) will increase from 1.38 billion shares to 1.72 billion (or around 92.2 per cent of the offer size).

The subscription period for the IPO remains unchanged. The retail offer will close on September 20 and the qualified investor offering on September 21.