Spinneys will have every reason to be pleased with the IPO takings. Retail and institutional investors lined up for the offer, as Spinneys plans an entry into a new market - Saudi Arabia. Image Credit: Spinneys

Dubai: As expected, the Dubai retailer Spinneys has set its IPO price at Dh1.53 a share, the high end of its Dh1.42-Dh1.53 range. This will result in offer proceeds of Dh1.38 billion and a market cap of around Dh5.51 billion at the time of its DFM listing on May 9.

The IPO raised Dh71 billion via the subscription, thus being oversubscribed 64 times in aggregate (which excludes the cornerstone tranche). This is the 'highest level of demand and oversubscription of a non-government-related IPO on the DFM in recent years'.

"Spinneys presented an opportunity for investors to participate in a rare UAE private sector listing," said Sunil Kumar, CEO. "And in the story of a business that has evolved over the decades to become one of the country’s leading premium fresh food retailers."

Raised retail investor tranche

The retailer had offered a 25 per cent stake through the float, with the retail investor tranche making up 7 per cent (from 5 per cent earlier). (There were also cornerstone investors, which included Franklin Templeton entities.) 

"We have a strong track record of financial performance, with resilient like-for-like growth and strong margins," said Kumar.

Something that investors clearly noticed going by the subscription tally. Total proceeds raised from the UAE retail offering garnered more than Dh1.9 billion, which is an oversubscription of 20 times (on the upsized tranche size).

Spinneys is a brand with enormous ambition, a presence in fast-growing markets in the GCC, and is positioned to capitalise on the very positive macroeconomic tailwinds this region is experiencing

- Sunil Kumar of Spinneys

The retail investors will receive an SMS confirmation of their respective allocation on May 7, with refunds due to commence on the same date.

"This continued strength in demand suggests that the pipeline for further IPOs will only strengthen as new sectors of the economy are opened up for investors," said Sameer Lakhani, Managing Director at Global Capital Partners. "And even allow UAE companies to offer compensation packages that include ESOP (employee stock ownership plan) as a way to retain/attract talent.

"For now, the burgeoning demand in UAE capital markets is expected to continue and spill over into the secondary markets. Spinneys represents a healthy mix of growth and income opportunities for the long-term investor in a sector that has gained increasing significance post-Covid."

Institutional interest

The qualified investor part of the offer was oversubscribed more than 68 times (excluding the cornerstone tranche). Total proceeds raised from the UAE Retail Offering in excess of Dh1.9 billion and oversubscribed c. 20 times (on the upsized tranche size).