Dubai: Al Ansari Financial Services has set a price range of Dh1-Dh1.03 for its IPO opening for subscription today (March 16), and aiming to be the first of more UAE family-owned businesses that will go on to a listing on DFM or ADX.
Al Ansari Financial Services received orders for all shares offered within an hour of books opening, marking a strong start for the emirate's first listing of the year, according to Bloomberg.
The IPO offers 750 million shares from a group whose flagship entity Al Ansari Exchange is the UAE market leader in the remittance space. The details of the price range was announced through a newspaper ad. The final price is to be announced on March 27.
National Bonds Corporation will join as a 'cornerstone' investor with Dh200 million.
This values the company at Dh7.5 billion to Dh7.725 billion.
The Al Ansari subscription runs until March 24, for a float that sees 10 per cent of the Dubai-headquartered company being offered to retail and institutional investors. The medium-term strategy will be to expand the group’s already entrenched presence in the UAE and also seek strategic forays into some of the other Gulf markets.
"There is a very strong correlation between the number of branches and the market share," said Rasheed Al Ansari, CEO at a recent media briefing. "In the last few years, we opened 41 branches and 60 per cent of them became profitable from the first month - this is something we haven't seen in the history of the company.
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"It means the customer wants to come and interact with us through physical branches. We will pump in energy and effort in order to expand the branch network and to satisfy the demand in the market. We expect to have an implemented 60 (new) branches in coming quarters.• National Bonds Corporation (“National Bonds”) has committed to a cornerstone investment in the IPO with a total commitment of AED 200 million (US$ 54.5 million)
The other expansion will be on the digital side of the services, with remittance flows already seeing heavy transactions through online and app options in the Gulf.
A third push post-IPO for Al Ansari would be to raise its ‘value proposition’ in the higher margin corporate remittance space.
“The remittance business is integral to the UAE/Gulf markets – and as a market leader there’s much that Al Ansari can do to seek higher growth in the next few years,” said a market analyst. “How fast it can get into the other Gulf markets will be decisive.”
- Sameer Lakhani, Managing Director at Global Capital Partners
The operations in Kuwait, where it launched in 2002, will soon be completely owned by Al Ansari Financial Services. On completion of the deal, this gives the group a ‘strong presence in the sixth-largest outward personal remittances market globally in 2021’.
126,000Average daily transactions at Al Ansari
UAE’s busy with IPOs
The UAE currently has a second IPO subscription process running, that for presight.ai, part of the Abu Dhabi based G42 conglomerate. (Media reports this week said G42 has taken a stake in ByteDance, the Chinese company behind the wildly successful TikTok short-video digital portal.)
And there was the listing by ADNOC Gas on ADX after a blockbuster IPO. It is also the largest listing on ADX to date.
The SVB shadow
On ADX and DFM, trades suggest the investor mood is subdued as global markets still factor in the full extent of the Silicon Valley Bank collapse and the gyrations the Credit Suisse stock price is going through. The UAE and Gulf stocks remain well insulated from SVB, with Bahrain's GFH confirming only a marginal exposure to it.
This could even mean doubling down on local/regional stock options for UAE and Gulf investors. "Al Ansari has proposed a good sized dividend, it taps into a steady base of committed clients regularly, and there's a chance for more growth in the core remittance business," said an analyst. "That's all that should matter to investors looking at this IPO."
- Oliver Schutzmann, CEO at Iridium Advisors
One success story is Tamara, a Saudi buy-now-pay-later firm that raised $100 million in its Series B round last year. This exemplifies the potential for fintech firms in the region to secure significant investment and scale rapidly.
More to follow...