Dubai: Fashion retailer Marka will list on the Dubai Financial Market (DFM) on September 25, a first in the series of IPO (Initial Public Offering) that is expected to boost investor appetite.
The company was recently named as the exclusive franchise operator for 5 international brands. It expects to open its first store by early of 2015 and more than 35 stores by 2020. The company also wants to buy to acquire businesses in the retail and hospitality sectors, reflecting the company’s strong revenues and profitability in the near-term,
“It [the Marka IPO] should have positive sentiment on the market. This will bring more liquidity in the market,” said Musa Haddad, equity fund manager at NBAD’s asset management group.
The company is the first retail focused company to list on the DFM and was the first to conduct an IPO since 2009. The company offered 55 per cent of its shares, equivalent to 275 million shares, for an IPO, which was 36 times oversubscribed with a total value of Dh10.345 billion.
The company’s founders are New York-Listed Chimera Investments, which holds 5 per cent in the company and Dubai Investments, which owns 3 per cent stake in the company.
A greenfield project
The IPO comes a week before the Emaar Mall’s IPO, whose institutional investor portion was fully subscribed within a few days of the offering.
“Both IPOs are different, and it is not fair to compare these two due to differences in scale and business model. Emaar Malls Group is a free cash flow generating business with a track-record while Marka is a greenfield project. They differ in terms of size of offering as well — Marka is raising Dh275 million while EMG’s offering size is approximately Dh5.8 billion at the upper price range,” said Vijay Harpalani, assistant fund manager, asset management, Al Mal Capital, when asked to compare both the IPO’s.
The developer of the world’s tallest tower started selling at least 15 per cent of shares in Emaar Malls Group from September 14, and plans to list them on Dubai Financial Market on October 2. The share sale is touted to be one of the biggest after the credit crises of 2008, when many companies were forced to restructure debts and stall projects.
At least 70 per cent of the Emaar Malls offering will be allocated to qualified institutional investors and 30 per cent to individuals. A minimum 10 per cent will be earmarked for Emaar shareholders as of September 10, while the Emirates Investment Authority reserved 5 per cent of the offering allocated to institutions.
Abu Dhabi Securities Exchange (ADX) is in talks with four private companies for an initial public offering (IPO), out of which two may get listed this year, Rashed A. Al Beloushi, chief executive officer at ADX said on September 22.