Empower will have pleased retail investors quite a bit with the latest decision on increasing their IPO allotment. Image Credit: Ahmed Ramzan/Gulf News

Dubai: Empower, the Dubai district cooling company, keeps on giving – it has raised the retail tranche in the IPO from 100 million shares to 300 million due to ‘significant demand and oversubscription’

Simultaneously, the ‘qualified investor’ tranche will be reduced from 1.9 million shares to 1.7 million. Empower is widely expected to confirm a per share price of Dh1.33. Analysts had been hoping for a higher retail investor allotment right from Day 1 of the IPO's opening, given the heavy interest for dividend promising Dubai blue-chips. And also buoyed by Empower's prospects of growing further with each new project or real estate development being added to the city.

The subscription period for retail investors has already closed, but Empower’s decision will still grant those who subscribed with a higher portion than what they would have got otherwise. Based on the previously announced price range of Dh1.31-Dh1.33 per share, the retail tranche will now be between Dh393 million and Dh399 million, and representing 15 per cent of the total deal size. The revised follows the announcement last Friday to increase the offer size to 20 per cent.

At the time of the IPO announcement, Empower - the world's biggest district cooling company and with a market share approaching 80 per cent in Dubai - was offering 10 per cent.

Empower, which cools Dubai's iconic destinations such as the Palm, DIFC and Meydan, expects to issue a minimum Dh850 million annual dividend.

Empower IPO size
Yes, retail investors will get more, but the size of the Empower IPO remains at 20%. This is because the qualified investors tranche has been cut down to 1.7 million shares from 1.9. It also means that the two key shareholders - DEWA and Emirates Power - will continue to hold 56% and 24% of Empower’s existing share capital respectively following the offering.