Dubai: Participating banks in the UAE are all set to hit the ‘Send’ button releasing funds that would allow their accountholders to subscribe to the DEWA IPO, which opens March 24. The stock market float of Dubai’s utility company has triggered one of the biggest retail investor responses ever for an IPO in the UAE – and the next 48 hours could get more to participate.
Market sources say that the interest has been widespread, including from overseas individual investors. “There have been other high-profile stock market listings of blue-chips in the UAE – but DEWA is taking interest to a whole new level,” said a market analyst. “Right now, the need to subscribe – even among those who have never invested in Dubai stock market before – is intense.” (The DEWA stock pricing will be known only just ahead of the offer opening.)
Yes, individual investors are putting off other asset purchases, whether it is in other stocks, gold or Bitcoin. There is market chatter about investors diluting their stakes on current DFM-listed stocks and going all for the Big One – DEWA.
As of now, subscriptions will be offered for 6.5 per cent of DEWA’s capital, and with a provision to raise the offer size. The offer prices will be known just before the start of the subscription period on Thursday. (For retail investors, the offer period will be open until April 2.)
This is what retail investors will be eyeing. This allotment represents 8 per cent of the offered shares, and will be eligible only for:
• Individual subscribers who have a bank account.
• Minors can apply, provided they do so in accordance with the procedures applied by the receiving banks and the laws in force in this regard. (According to one UAE National, he is planning to invest as he sees the DEWA stock as an investment in his children’s future. “This is Dubai’s ‘Apple’ or ‘Facebook’ IPO moment,” he said. “This is all about the future.”
• Other investors such as companies and establishments too can participate. They must have a bank account, that’s it.
All ’First Tranche’ subscribers need to hold an Investor Number registered with Dubai Financial Market (the ‘NIN’). (Subscribers take note: If the NIN is not provided or an incorrect one is given the subscription will be rejected.)
DEWA is a practical reflection of a public and private partnership
The minimum application size for this tranche is set at Dh5,000, and with all additional applications to be in increments of Dh1,000. Each subscriber will have a guaranteed allocation of 1,000 shares.
Joining in could be high net worth investors from Pakistan, who until now have preferred property buying or launching a business as part of their presence in the UAE.
"While the stock market of Pakistan is somewhat challenged at present, I see a great deal of interest in investing in the DEWA IPO from the Pakistani community," said Bilal Moti, Chairman and CEO of Windmills Valuation Services.
This explains the heavy subscriber interest in the stock offering. “Dubai and DEWA have taken approach that makes the stock accessible to the widest base of potential subscribers,” said an analyst. “Based on what we can see so far, retail investor participation will be heavy. This clearly is the most talked about IPO in the retail space.
“The Dubai stock market has seen high-profile listings such as the ones from Emaar. But DEWA arrival as the first of 10 from Dubai-owned government enterprises takes it to a new level.”