Stock - DFM / Dubai Financial Markets
Tecom Group will likely land on DFM on July 5 in the second stage of Dubai's 10 IPOs. Image Credit: Bloomberg

Dubai: Post-IPO, Tecom Group expects to pay Dh800 million a year for the first three years, bringing in a semi-annual distribution policy every October and April.

“The company’s ability to pay dividends is dependent on a number of factors, among others, the availability of distributable reserves, the Company’s capital expenditure plans, and market conditions,” Tecom said in a statement.

The Tecom IPO will start rolling from next week, setting up the second of Dubai’s planned line up of 10 stock market listings for government-owned enterprises.

"Given the fact that past IPOs have been “anchored” at the rate of 5 pe rcent yield, Tecom’s dividend of Dh800 million implies that the valuation of the company will be around Dh16 billion," said Sameer Lakhani of Global Capital Partners. "Tecom with a blend of rental yields and business formation license revenue - and with a substantial land bank - provides investors with a best of both worlds approach. There is the stable annuity cashflow alongside opportunities for growth as the city expands its business footprint."