Dubai: Fashion retailer Marka jumped more than 59 per cent at the close on the first day of trading on the Dubai Financial Market, making it the first Initial Public Offering (IPO) in Dubai after a five-year hiatus.
Shares of Marka opened at Dh1.77, about 77 per cent higher than the IPO price of Dh1. Marka rose as much as Dh2 in intraday trade, with a volume of 98 million shares. It closed at Dh1.59, a gain of 59 per cent during the day’s trade.
“This [the response] shows that the market is healthy and I think we came in at the right time. We are expecting a good future for the company,” Jamal Al Hai, chairman of Marka said.
“This reflects trust of investors and people of Dubai although we have not started as yet,” Al Hai added.
Marka, which postponed the listing from June due to huge volatility, had offered 55 per cent of its shares, equivalent to 275 million shares, for the IPO, that was 36 times oversubscribed.
The company’s founders are Abu Dhabi-based Chimera Investments, which holds 5 per cent in the company and Dubai Investments, which owns 3 per cent stake in the company.
This is very first IPO since 2009 ahead of a busy season on the back of a rebound in equity and property markets. Emaar Properties unit Emaar Mall Group’s IPO’s subscription will end later this week. It plans to raise $1.58 billion.
The company plans to list its unit’s shares, which has been priced at Dh2.5-2.9 per share, on October 2.
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.
In other IPOs, two companies have listed shares on the smaller of Dubai’s two stock markets, Nasdaq Dubai, over the past 12 months. At least two companies may get listed by this year on the Abu Dhabi Securities Exchange (ADX), Rashed A. Al Beloushi, chief executive officer at ADX said on September 22.
Acquisition by early October:
Marka is in talks with 7-8 potential companies in the Middle East and the Gulf region, and may acquire some of these by the beginning of next month, its chairman said.
“It will be a multiple acquisitions. If the company is profitable and good we are ready to spend a good amount,” Al Hai said. He declined to give details on the ticket size of the acquisition.
“We are ready to spend 90 per cent from the capital,” Al Hai said. The company has Dh500 million of capital. On September 22, Marka said they plan acquisitions in the retail and hospitality sector, that will form a cornerstone of its strategy to achieve profitability earlier than previously announced. 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.