Stock – Al Ansari IPO / Rasheed Al Ansari
(From left) Mohammad Bitar, Deputy CEO, Al Ansari Financial Services, Rashed Al Ansari, CEO, Al Ansari Financial Services, and Faisal Anwar, CFO, Al Ansari Financial Services, announce the intention for Al Ansari Financial Services to float on the Dubai Financial Market. Image Credit: Clint Egbert/Gulf News

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.

Video: Clint Egbert | Editing: Irish Eden Belleza | Reporting: Nivetha Dayanand

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)

Stock – Al Ansari IPO / Rasheed Al Ansari
"Just to give you an indication of the size of the operation, we have a 35 per cent market share in the UAE when it comes to foreign currency business and 38 per cent on remittances," said Al Ansari.

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.”

Attractive pricing
'The Dh1-Dh1.03 share range values Al Ansari at an earnings multiple of between 12-12.5x, which is fairly attractive compared to regional and international benchmarks. Al Ansari marks the first 'pure-play' family IPO in the UAE, which is encouraging for other such privately-owned entities to raise capital in the domestic financial markets for their expansion plans. We expect others to follow in the coming year as the shift in emphasis on capital markets and equity capital increases.'

- Sameer Lakhani, Managing Director at Global Capital Partners

Kuwait presence

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’.


Average daily transactions at Al Ansari

UAE’s busy with IPOs

The UAE currently has a second IPO subscription process running, that for, 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."

Gulf fintechs - are they ready to move from private to public?
'The B2B and B2C payment market in the region is experiencing a significant surge, thanks to supportive regulatory environment and widespread digital adoption. With the UAE's Instant Payment Platform (IPP) and other regional initiatives, the stage is set for innovative fintech companies to emerge, scale quickly, and ultimately raise capital.

- 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.

- Oliver Schutzmann of Iridium Advisors

More to follow...