The company plans to use proceeds from the IPO to further develop its capital financing services business line and increase investments in capital deployment. Image Credit: Supplied

Dubai: The UAE's IPO market is again hitting its strides after summer, with that of Investcorp Capital opening.

The price range for the offer is Dh1.9 to Dh2.30 a share, which works out to an equity value of Dh4.16 billion to Dh5.04 billion and a target dividend yield of 9.9 per cent to 8.4 per cent for the financial year ending June 30, 2024.

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Based on this price range, Investcorp Capital expects gross proceeds of Dh610.9 million and Dh739.5 million, and thus a dividend ranging between Dh411.7 million to Dh422 million for the financial year 2024. That’s equivalent to 8 per cent of the net asset exposure of Dh4.53 billion as at 1 July 2023, increased by the primary proceeds raised in the offering.

The final offer price is to be announced on November 10, while the listing on ADX is set for November 17. The final issue size will be between Dh1.22 billion to Dh1.47 billion.

The subscription period runs until November 8 for professional investors subscribing in the first tranche, and a day later for those subscribing to the second tranche.

Number of shares on offer
Investcorp Capital plans to float 643 million ordinary shares with a nominal value of $0.50 (equivalent to Dh1.84) each in the IPO. This represents 29.34% of the issued share capital after the issuance of the new shares.

Cornerstone investor

The IVC Strategic Investment Company will put up around $250 million and be a cornerstone investor in the IPO.

"Now that the first IPO after summer is open, investors and the UAE markets will be gunning for the next one," said an analyst. "Everyone is agog on whether that would be the Dubai Taxi one."

Investcorp Capital's 'price stabilisation' push
A 'stabilising manager' will be appointed by Investcorp Capital for the IPO, who could, 'to the extent permitted by applicable law, effect stabilizing transactions' to support the market price of the shares. This will in each case be at a higher level than that which might otherwise prevail in the open market.

The stabilizing manager will be appointed for a period not more than 30 days from the listing admission.

"All stabilizing transactions will be undertaken in compliance with applicable law and regulation, including ADX rules," Investcorp said in a statement.

The stabilizing manager will need to disclose to the market the extent of any stabilizing transactions conducted in relation to the offering.