Burjeel Holdings currently has operations in the UAE and Oman, and had confirmed a $1 billion investment push into Saudi Arabia. Image Credit: Supplied

Dubai: This time, the IPO action will be in Abu Dhabi. The UAE private hospital operator Burjeel Holdings will list 11 per cent via a public float and ahead of its listing on ADX by October 10. The offer will comprise of 200.39 million new shares, and will open for subscription September 30.

In all, up to 350.33 million shares will be floated by the owner, VPS Healthcare. The announcement of the IPO comes days after Abu Dhabi's investment giant IHC confirmed a 15 per cent stake in Burjeel. (There is an option to increase the issue size, according to Burjeel.)

"As healthcare expenditure continues to increase across the region, Burjeel Holdings is strongly positioned to benefit through our focus on providing complex, specialized medicine for all socioeconomic groups, through a targeted, multi-brand strategy," said Dr. Shamsheer Vayalil Parambath, Chairman of Burjeel. "Our strength is reflected in our strong and profitable financial performance, where we recorded compound annual revenue growth of 18 per cent between 2019-21 and EBITDA growth of 37 per cent."

The ADX is up 18.1 per cent in the year-to-date, one of the handful of standout performers amidst the increasing gloom enveloping global stock markets.

Burjeel's dividend plans
The Abu Dhabi healthcare group expects to pay dividends from 2023 on, on the 'expected basis of a payout ratio of 40-70 per cent' of net income. This will be 'dependent on the required investment for additional growth plans'.

"In the absence of any attractive investment opportunities that meet the Group’s investment criteria and return thresholds, the Group will distribute dividends at the upper end of the pay-out ratio range or potentially higher," according to a statement.

"The first interim dividend is expected to be paid in the second-half of 2023 on the basis of net income for the first-half of 2023."

With Burjeel, "The financials of the company are great to a get a strong pricing for the listing," said Vijay Valecha, Chief Investment Officer at Century Financial. "Burjeel with the scaled down IPO looks to be going steady, but it is now closed to international investors."

In 2021 and the six months ended June 2022, Group revenues hit Dh3.35 billion and Dh1.89 billion, while EBITDA hit Dh779.1 million and Dh414.2 million. Net profits came to Dh234.1 million and Dh152.9 million for the corresponding periods.

"Our long-term vision focused on increasing access to quality healthcare has driven our growth over the past 15 years," said Dr. Shamsheer. "Today, we are one of the leading private healthcare services platforms in the UAE with a diversified portfolio of 16 hospitals, including our flagship facility Burjeel Medical City, and 23 medical centres, across the UAE and Oman."

A step into Saudi Arabia

This is where the Saudi plans come into play. The $1 billion in spending there - for the period up to 2030 - will be through alliances with established healthcare facility operators there rather than greenfield investments. This, according to the company, would make better sense from a fund utilisation point. Market talk is that confirmation of the first Saudi deal could happen in weeks.

Healthcare sector is still vastly under-represented on UAE stock markets. NMC Healthcare, the other Abu Dhabi based entity, went in for a UK listing in 2012 (and delisted in 2020).

“Burjeel offers another investment option for the risk-averse UAE investor,” said an analyst. “The best part is that most of the network building in the home market has already been achieved by the company. Entry of IHC as investor and the plans for Saudi Arabia would be big positives for the IPO investors.”

As we mark another significant milestone in our journey today, I’m confident that our robust business model, relentless focus on clinical excellence, world-class people and strong commitment to governance will all play key roles in the next chapter of our story

- Dr. Shamsheer Vayalil Parambath of Burjeel Holdings