Stock - Dewa
The DEWA IPO is good to go - the offer price range values the company between Dh112 billion to Dh124 billion. Image Credit: Bloomberg

Dubai: The DEWA IPO is open for subscription, marking the first decisive step in Dubai’s push to open up its stock markets to some serious action. The DEWA offer price will be between Dh2.25 to Dh2.48 a share, valuing the utility company at between Dh112 billion to Dh124 billion.

The final offer price will be announced on April 6. The opening of subscriptions, according to analysts, will generate the biggest response yet for an IPO in Dubai.

Keeping the offer price at under Dh3 a share, DEWA – and its shareholder, the Dubai Government – is casting the net as wide as possible to bring investors on board and, just as important, add depth to the local capital market by bringing in a new generation of investors, UAE Nationals and residents alike.

Retail investors can sign up for a share of the 3.25 billion shares being offered – or 6.5 per cent of the company – between now and April 2. Institutional and foreign investors as well as DEWA employees too will be participating in what is Dubai’s biggest stock market float to date. (Institutional investors have until April 5 to submit their interest.)

The share price suggests a future yield of 5 per cent or higher for DEWA’s IPO investors, easily at the top range for companies listed on the Dubai Financial Market. The share price suggests a future yield of 5 per cent or over for DEWA’s IPO investors, easily at the top range for companies listed on the Dubai Financial Market. (The yield is based on the company’s stated dividend policy, with DEWA confirming it will be paying a minimum of Dh6.2 billion a year from October this year to April 2027.)

More power to the IPO

DEWA also confirmed its latest financials, with 2021 revenues at Dh23.82 billion and up from Dh22.46 billion a year ago. Net income came up to Dh8.07 billion, boosted by a Dh1.51 billion addition as ‘other comprehensive income’. In 2020, the total income was at Dh3.18 billion.

DEWA's IPO will be setting milestones
The sheer magnitude of the utility giant’s offering is a key reason why investor participation is expected to set a new record for an IPO in Dubai.

This will be the first new listing in Dubai since late 2020 and the biggest IPO on the DFM since 2017.

Analysts are cheering the share offer pricing, saying that this will encourage all categories of investors. They add that this improves the chances of the offer being heavily subscribed.

DEWA's strong set of financial results is another factor that sets up the utility giant to run a hugely successful IPO.