Dubai: UAE's latest IPO, from Abu Dhabi's Burjeel Holdings, has set the sell price at Dh2 a share, which is the lower end of the price spectrum. The IPO has proved a hit being over-subscribed 29 times and raising a gross total Dh32 billion.
"The Dh2 a share pricing will strike a chord, in much the same way that Salik did with its IPO," said a market analyst. "The 29x over-subscription too was more or less expected, given that the Burjeel float was smaller - at 11 per cent - and limited to local investors. As far as Burjeel's promoters are concerned, they should be quite fine with the results."
During the book-building, the share price's range was Dh2-Dh2.45. Fixing it at Dh2 represents a tactical move and will pay off in post-listing volumes, analysts add.
The offering will translate into proceeds of Dh1.1 billion for Burjeel on settlement. Based on the final offer price, Burjeel’s market cap on listing will be around Dh10.4 billion, 'making it one of the largest private healthcare companies on ADX by market cap'.
“I am delighted to welcome our new shareholders to Burjeel Holdings," said Dr. Shamsheer Vayalil Parambath, founder and Chairman. "The strong demand oversubscribed reflects the high-quality investment opportunity provided by Burjeel Holdings, built around our clear clinical vision and our strong growth trajectory in the MENA region.
"The offer price reflects our desire to prioritize a supportive after-market performance post-listing and we are delighted that Burjeel Holdings will be one of the largest private healthcare companies on ADX once listed. The success of the offering is also due to the supportive Abu Dhabi ecosystem and will help further diversify the local capital markets.”
Investors who subscribed via the first tranche will receive an SMS confirmation of their respective allocations on October 8, with refunds due to commence from the same date.
Listing on ADX is expected to take place on October 10. (VPS Healthcare Holdings will continue to own a majority 70.0 per cent stake in the company, with Abu Dhabi investment powerhouse IHC having 15 per cent.)
“The Burjeel listing will come amidst strong speculation that another leading UAE healthcare operator might be thinking of going public,” said the analyst. "DFM too could see a healthcare-focussed entity in the short-term."
The (Dh2) offer price per share provides investors with a highly attractive value proposition that reflects the selling shareholder’s long-term confidence in Burjeel Holding’s growth trajectory and reflects its decision to prioritize a supportive aftermarket performance post-listing