Stock-Spinneys IPO Debut
Another listing shows up on Dubai Financial Market, with Spinneys getting an enthusiastic response in the opening minutes. Image Credit: Supplied

Dubai: The Dubai retailer Spinneys too is getting its first-day bounce as the stock started trading on the Dubai Financial Market after a solid IPO run. The company had offered 25 per cent stake in the company through the float, with retail investors getting 7 per cent of it.

The stock opened at Dh1.53 and is trading higher in the 6-10 per cent range after the first 10 minutes.

By 10:30, Spinneys had racked up over 75 million in volumes traded, with the stock at Dh1.65, up by 7.19 per cent.

Spinneys recorded profits of Dh254 million in 2023, continuing a strong trajectory from 2021. This was a period when it expanded its footprint in its core market of Dubai, where it has a 27 per cent share in the grocery space, and into online retail, which is now a growing component of its overall revenues.

Spinneys has a 75-store network in the UAE, including those bearing the name of 'Waitrose', under a licensing agreement with the UK supermarket operator. "We have preferential ties with many of UAE's leading developers when they are planning their next developments," said Sunil Kumar, CEO. "And what they plan to build gives us a landscape to plan where we want to open in the next 5 years."

Sunil Kumar, CEO, and Ali Albwardy, Chairman, of Spinneys at one of the new store openings. Image Credit: Supplied

The target is to keep maintaining the double-digit growth annually, and something Kumar is confident of given the affluent new residents the UAE is attracting - and who could add to Spinneys' shopper base. "With new stores, we can go from 300 square metres in the most densely populated areas of the UAE to 2,000 square metres, if we have that space format available," said Kumar. (As for Saudi Arabia, it will only be the 'Spinneys' brand that will make an entry. Any new Waitrose stores will be in the UAE only.) 

Spinneys' dividend
Spinneys expects to maintain a shareholder payout of 70% of annual distributable profits after tax.

In all, Spinneys offered 900 million shares at Dh1.53, implying a market cap of Dh5.5 billion. The subscription was covered more than 64 times (excluding the cornerstone tranche). "The remarkable oversubscription of the offering underscores the strong investor appetite for quality assets within the UAE and across the broader MENA region," said Karim Meleka, co-Head of Investment Banking at EFG Hermes, which acted as advisory to the IPO. 

"The overwhelming investor interest in the offering reflects the company's robust growth potential and serves as a resounding vote of confidence in the broader economic outlook of the UAE.”

What's next for Spinneys

First up will be the entry into Saudi Arabia through a joint venture and store openings in key cities and locations. The Saudi operations and future returns from it will play a pivotal role in investor attention for the stock. 

As for UAe stock, more will be emerging in the short term. So far in 2024, there have been two, Parkin and Spinneys.

"Whilst Spinneys' listing marks another success story for the capital markets, investors need not focus on the first day 'pops' but on the longer term value proposition the company provides and has brought to the investing ecosystem," said Sameer Lakhani, Managing Director of Global Capital Partners. "It’s successful offering will further provide impetus to other private sector companies as well as attract medium- and long-term investors seeking exposure to different sectors of the economy."