Dubai's Parkin IPO to open March 5 by offering 24.99% in UAE's first stock market float of 2024
Retail investors to get 10%; third RTA entity to hit DFM after Salik, Dubai Taxi
Dubai: The UAE’s first IPO of 2024 will be from Parkin, the Dubai headquartered parking space operator, which is floating 24.99 per cent. Subscriptions open March 5 and goes on until March 12, with the offer price range to be announced on March 5, according to ad prospectus issued by the company.
Ever since Dubai confirmed the incorporation of Parkin, the anticipation was building up among retail investors for the IPO. This is also the third entity to float and list on DFM from the RTA universe, after Salik and the more recent one from Dubai Taxi Co.
Retail investors will get a chance to pick up 10 per cent of the stock float, and guaranteed to receive a minimum of 2,000 shares apiece.
The minimum application size for the retail tranche is Dh5,000 and thereafter in increments of Dh1,000 apiece.
Parkin accounts for more than 90 per cent of Dubai’s on- and off-street paid parking spaces, and with the ‘exclusive right’ to operate all public on-street parking and off-street parking. Last year, it had revenues of Dh779.4 million.
In sheer numbers, Parkin operates 175,000 parking spaces across 85 locations in the city, another 4,000 or so spaces at nine MSCPs (multi-storey car parks), and about 18,000 spaces at seven developer-owned facilities.
Parkin closed 2023 with Dh779.4 million in revenues, and that’s consistent top-line growth over 2021’s Dh590.6 million and Dh686.2 million from 2022.
The 2023 net profit was Dh414.4 million, from Dh336.5 million.
Concession deal with RTA
Parkin’s ‘principal asset’ is the concession agreement with RTA, whereby it will have exclusive rights to operate ‘all current and future’ paid parking facilities in Dubai. The agreement is ‘long-dated’ and comes with a tariff ‘uplift’ mechanism to offset inflation.
This is how Parkin will target more future revenue creation:
- Through converting a portion of unpaid parking spaces. There are about 392,000 such spaces currently.
- Deals with real estate developers.
- Adjust zoning in the city's high demand parking space areas.
- Bring in more digital initiatives to raise efficiency.
- Offer new commercial activities such as payment channels and renting space to food trucks and companies that build mechanical car parks. Also, provide car washes and car tinting services.
- Allow for advertising spaces.
- Develop geographically where possible.
Another bumper year for UAE stocks?
Parkin thus sets an early marker for the UAE stock markets, after two exceptionally busy IPO runs through 2022 and 2023. Last year had closed with back to back bumper responses, for Dubai Taxi and PureHealth in Abu Dhabi.
According to banker sources, retail investors had been preparing for the Parkin IPO ever since the company's incorporation was announced early January. The aim - get into Dubai's transportation linked service providers, whether that's Salik, DTC and now, Parkin.
In this run, shareholders have been amply rewarded. Salik's stick is up 80 per cent since its listing September 2022, and Dubai Taxi has gained 20 per cent since its debut December 6 last.
"The strong earnings numbers of Parkin further buttresses investor expectations of long-term capital gains for RTA's carve outs," said Sameer Lakhani, Managing Director at Global Capital Partners. "Investor interest is expected to be strong. Whilst the IPO pricing has not been announced, comparable listed companies on Nasdaq like SP Plus Corp trades at 30x, implying significant upside potential for Parkin given that valuations typically are priced at a discount to their peers."