Alef Education has an extended long-term contract to offer its solutions to all public schools in the UAE, as well as a growing number of its privately owned institutions. Plus, it is expanding in overseas markets too. Image Credit: Shutterstock

Dubai: Another UAE IPO has pulled in heavy subscriptions, with Alef Education raising more than Dh74 billion ($20 billion), which works out to an over-subscription of around 39 times. 

The ADX bound education-tech company has set its IPO price at Dh1.35 a share, which is what analysts had been expecting. The offer had a price range of Dh1.3 to Dh1.35.

"As a trusted partner of choice to governments, schools, and educators, the 39x over-subscription not only reflects the appeal of our offering but also the belief in our future growth and ability to continue advancing educational outcomes for the communities we serve," said Geoffrey Alphonso, CEO. 

"Looking ahead, we have ambitious growth plans to expand further into our target markets, broaden our product offering and continue delivering value to our core UAE market. Our investment proposition is strong, and the robust demand for our shares has ensured a successful IPO process."

Based on the Dh1.35 price, Alef Education's market cap at listing of Dh9.45 billion and result in offer proceeds of Dh1.89 billion. The ADX debut is scheduled for June 12.

Alef Education's main shareholders
With the IPO done, the selling shareholders - Tech Nova Investment – Sole Proprietorship llc and Kryptonite Investments llc - will retain stakes of 68% and 12%, respectively.

Dividend yield

The offer saw 20 per cent being floated (1.4 billion shares). Based on the final offer price, the annualised dividend yield will be a minimum of 7.1 per cent. "We now look forward to onboarding our new shareholders, including local retail investors who make up a core and important element of our Offering and shareholding going forward," said Alphonso.

Shareholders will get a 'minimum dividend' of Dh135 million for 2024 and 2025.

The UAE's previous IPOs this year were from Parkin and the retailer Spinneys. Already, with Alef Education hitting its targets, the attention shifts to who's the next one coming from the IPO pipeline. The talk in the markets has again fixated on when Abu Dhabi headquartered LuLu Group plans to launch its share offer.

"The continued opportunity offerings in diverse areas of the economy is resonating with retail and institutional investors," said Sameer Lakhani, Managing Director of Global Capital Partners. "Appetite remains strong for these IPOs. Of course, the real proof of the pudding is in the performance of the secondary markets - valuation metrics are key here.

"The long term performance will be the key driver for the capital markets and investor confidence."