Dubai: Al Ansari Financial Services will be the first Dubai IPO of 2023, offering 750 million shares for 10 per cent of the company's existing share capital. For retail investors, the subscriptions will run from March 16 to 23, while that for qualified investors, it would end on March 24.
The price band for IPO has not been revealed. The listing on DFM will happen 'on or around April 6'.
"We are not going for an IPO to raise money - the company is cash-rich," said Rashed Ali Al Ansari, Group CEO. "We are embarking on this IPO journey to really protect the five-and-a-half decades of success we've had, preserve it, and reposition the company for its next phase.
"It is very different when I go to new markets and new jurisdictions and say I'm a family business - they talk to you differently than when you are a listed company and this is what we want to achieve.
"As a listed company, going less than 10 per cent will not provide enough liquidity for the shares in the market."
Potential subscribers will obviously have a close look at the dividend promise - the company will adopt a semi-annual dividend distribution policy. Al Ansari is targeting a 'minimum dividend of Dh600 million' for 2023, with the first payment being made in October and the second in April 2024.
A minimum dividend payout of at least 70 per cent of net profit is expected. The price band for IPO has not been revealed.
In 2022, the entity had a net profit of Dh595 million, helped by a wide network of remittance outlets and having taken additional market share since 2020 from the then market-leader, UAE Exchange Centre. Remittances provide the bulk of Al Ansari Financial Services' revenues, and last year, it provided Dh737 million of an operating income of Dh1.15 billion.
“Al Ansari Financial Services’ dominant and growing physical presence across the UAE and its leading position in the outward personal remittances and retail foreign currency market set us apart from other exchange houses," said Al Ansari, Group CEO.
By end 2022, Al Ansari was operating from 231 outlets and 'more than double' from the next competitor.
The broad spectrum of customers we service through in-person or digital channels provides us with an edge over other players in the market providing similar services.
The remittance volumes from the UAE - and the Gulf - continue to grow exponentially. While there is growing competition from banks offering their own such services and also from entities such as telecom-tech powerhouse e&, Al Ansari has the brand width to remain a dominant player, say market analysts.
Heavy IPO action
Al Ansari's launch comes just after the first UAE IPO of the year closed, that from ADNOC Gas. And there is another running concurrently, that from G42 owned presight.ai, a tech entity that will list on ADX.
What the likes of Al Ansari and presight.ai will do is create new verticals within the UAE stock markets, which had been dominated by property firms, banks and insurers, as well as telecom and investment companies.
In its investor pitch, Al Ansari cites forecasts for UAE's outward personal remittances growing at around 3.2 per cent CAGR between 2021-27 - and with exchange houses growing faster than the market at a CAGR of 4.2 per cent. The out of UAE personal remittances is likely to hit Dh211 billion by end 2027, with Dh138 billion being attributed to exchange houses and Dh73 billion going through banks.
Bank notes too back in growth
Al Ansari's other business line - bank notes - is expected to 'benefit from the recovery in tourist inflows'.
"As a market leader with an agile and CAPEX-light business model, which enables us to generate strong growth with limited investment capital requirements, and a very healthy cash profile, we believe we can harness favourable market trends in the UAE and across the GCC," said Rashed Al Ansari.
"Those organic growth drivers include an increase in the number of tourists, continued population growth with a large expatriate community. Furthermore, we are well positioned to capitalise on the strong macroeconomic backdrop with the UAE and other GCC economies which are expected to expand at a healthy pace in the mid-term."
- Sameer Lakhani, CEO of Global Capital Partners