Stock - Burjeel
Burjeel's near term heavy investment outlay will be in Saudi Arabia, where the Abu Dhabi entity has committed to spend $1 billion by 2030. Image Credit: Supplied

Dubai: Subscriptions are opening today for Abu Dhabi headquartered Burjeel Holdings’ IPO, with a price range of Dh2 to Dh2.45 a share. This implies an equity value of $2.7 billion to $3.3 billion for the UAE’s biggest (by capacity) hospital and clinic operator, which is floating 11 per cent ahead of an ADX listing on October 10.

The final offer price will be announced October 5.

Stock market floats in Abu Dhabi have received an overwhelming response this year, and analyst feedback is that Burjeel will easily mop up local retail investor interest. “In terms of institutional backing, Burjeel has already received heavy backing – from Abu Dhabi’s International Holding Co. (IHC) buying 15 per cent just before the IPO announcement,” said an analyst.

“Local retail investors will just follow that lead.” (IHC has not revealed the transaction cost on the 15 per cent stake buy.)

The Burjeel promoters expect to sell 350.33 million shares, which represent 7 per cent of the issued share capital. The IPO size could be increased at any point before the end of subscription period. The offer also includes 200.39 million new shares to be issued, representing 4 per cent of the issued share capital.

Assuming all the shares are sold, the size of the IPO will be around $300 million to $368 million.

Who can participate in Burjeel's IPO?
Investors who hold a NIN with the ADX and have a bank account (including those constituting 'assessed professional investors who do not participate in the second tranche).

There are no citizenship or residence

Financing Saudi plans

First up, Burjeel will be using part of the funds raised for the push into Saudi Arabia, which would make it the third GCC market it is in after UAE and Oman. The first of the planned Saudi projects could happen shortly, most likely through a joint venture. Burjeel is committed to spend up to $1 billion over the next seven years in the Kingdom.

"The Saudi moves will require significant investments, but the future returns will be just as sizeable," said a healthcare industry consultant. "Saudi Arabia requires massive additions to its healthcare capacities, especially through private investments. Burjeel will likely tap PPP opportunities in this space, and this would mean less need for greenfield projects."