Dubai: Subscriptions have opened for Alef Education's 1.4 billion shares, which make up 20 per cent of the education tech company's issued share capital. This is the UAE's third IPO of 2024, after Parkin and Spinneys, and the first one on ADX.
The offer has a price range is Dh1.30 to Dh1.35 a share, implying a market cap on listing of between Dh9.10 billion and Dh9.45 billion.
The subscription run will run until June 4 for retail investors and June 5 for institutional buyers. As a solutions provider to all public schools in the UAE and a good number of private institutions too, Alef Education has a track record that should resonate with investors in the IPO. It's associated with more than 7,000 schools, including in select markets outside the UAE and still has 7 years left on a 12-year minimum fee contract.
"Our successful track record of growth, underpinned by the value we provide and the trust we have built with international governments, customers, and partners – including ADEK (Abu Dhabi Department of Education and Knowledge) – has culminated in this milestone moment," said Abdulhamid Mohammed Saeed Alahmadi, Chairman.
Leveraging organic and inorganic means, we aim to super-serve our home market of the UAE
What's the dividend policy going to be?
Alef Education will maintain a semi-annual dividend policy, and expects to have a minimum payout ratio of 90 per cent of net profit generated for 2024 and 2025.
The company intends to pay a target minimum dividend amount equivalent to Dh135 million for the two years.
"If, during the minimum dividend guaranteed period, the portion of the declared dividend to all shareholders falls below the intended target minimum dividend amount, then the selling shareholders may - subject to not breaching AAOIFI Shariah standards - forgo their right to receive dividends to the extent necessary to pay the intended amount to all other shareholders," said the company.
According to Geoffrey Alphonso, CEO, “Our investment proposition has been incredibly well received by the market, with significant interest in our offering since announcing our intention to float.
"With the opening of subscriptions, we are offering UAE and international investors the opportunity to participate in the growth of a leading and homegrown player in the education technology sector—an underrepresented sector across UAE capital markets.
"We are committed to driving further growth across our platform and delivering sustainable long-term shareholder value, supported by our robust dividend policy."
Schools and edtech
Alef Education can be defined as an 'edtech' firm, with its solutions and services geared to aiding school going children. According to Forbes, the edtech industry globally is expected to rise from $133 billion in 2023 to $433 billion by 2030 growing at a cagr of 18.3 per cent. "Alef’s entry into this space allows investors to capitalize on this growth opportunity for not only the UAE but the region and internationally as its 'asset light' model differentiates it from traditional school operators," said Sameer Lakhani, Managing Director at Global Capital Partners.
More to follow...
