Dubai's biggest IPO opened on Thursday. DEWA shares to be priced between Dh2.25-Dh2.48. Image Credit: Ahmed Ramzan/Gulf News

Dubai: Keep the offer price low and make it easy for a maximum number of investors to take part – that’s the strategy DEWA has adopted with its IPO. At between Dh2.25 and Dh2.48 a share, the DEWA share sure is accessible, with banks and other lenders willing to extend whatever additional cash wannabe investors need to subscribe.

In what is likely to be Dubai’s largest-ever initial public offering (IPO) to date, the state power utility, Dubai Electricity and Water Authority (DEWA) began its share subscription on Thursday, amid upbeat prospects and heavy demand among investors.

IPO to raise up to Dh8.1 billion

The likely size of the IPO was made clear when the time to subscribe for shares opened. Multiple Dubai-based market analysts are evaluating how the 6.5 per cent stock flotation implied an IPO size of between Dh7.31 billion and Dh8.06 billion and a total market capitalisation in the range of Dh112.5 billion to Dh124 billion.

The analysts cheered the pricing, saying that this will encourage all categories of investors. They also added that this improves the chances of the offer being heavily subscribed, with the share allotment expected to end within a few days because of the surge in demand. The strong set of results that was published by DEWA also expectedly sets up the utility giant for successful IPO, the analysts further noted.

The final offer price will be announced on April 6. The opening of subscriptions, according to analysts, will generate the biggest response yet for an IPO in Dubai. The valuations would make DEWA the largest company on the DFM by market capitalisation.

Keeping the offer price at under Dh3 a share, DEWA – and its shareholder, the Dubai Government – is casting the net as wide as possible to bring investors on board and add depth to the capital market by bringing in a new generation of investors - UAE nationals and residents alike.

dewa timeline
DEWA IPO: A quick timeline Image Credit: Vijith Pulikkal/Gulf News

How to buy DEWA shares?

Even the processes have been made simpler. “Subscribers can do online registrations on DFM – through DFM e-subscription - by uploading their Emirates ID and bank account details,” said Vijay Valecha, Chief Investment Officer at Dubai-based Century Financial.

Vijay Valecha

“Moreover, most banks are now assisting with the same to make it an even more of a straight-forward process."

Each person looking to subscribe to or purchase shares in DEWA needs to submit one subscription application each, through his or her bank or brokerage, in his or her personal name (unless he or she is acting as a representative for another subscriber).

Subscribers or potential investors must ensure to have an updated NIN and complete all relevant fields in the subscription application along with all the required documents and submit it to the bank, together with the subscription amount expected to be made during the offer period.

You can instantly apply for Investor Number or you can submit the form and required documents via DFM eServices on their website (

DEWA is offering 3.25 billion shares, or a stake of 6.5 per cent in the company, in three tranches or portions to potential investors. But what portion of these are for individual investors?

2. The first portion of shares are made available to ‘retail’ investors, who are non-professional individual investors who invest money themselves or through brokerage firms. These investors are those with a UAE-based bank account and a DFM Investor Number (known as ‘NIN’).

3. The second portion of shares in DEWA is for institutional investors (legal entities like banks, funds, insurers or any large institution), while the third portion of the preliminary share offering is for eligible employees of DEWA .

4. While 260 million shares are offered to individual investors, 65 million shares are offered to eligible employees of Dewa. Meanwhile, 2.925 billion shares are offered to professional or institutional investors. Each share subscriber will have a minimum guaranteed allocation of 1,000 shares.

5. While the minimum subscription size for individual investors and Dewa employees has been set at Dh5,000, any additional investments can be made in lots of at least Dh1,000. When it comes to institutional investors, the base subscription has been set at Dh1 million. There is no maximum limit.

6. The share offering’s subscription period is expected to run from March 24 to April 2, meaning starting March 24 potential investors can subscribe to or buy shares. But before that, those looking to book shares can send in their subscription forms via their respective banks and express their interest in buying shares.

7. Beyond April 2, individual investors cannot subscribe to or buy any more shares before trading commences on April 12. Similarly, after April 15, professional investors or institutions cannot subscribe to or buy any more shares, a day after which their investments will be allocated.

8. Individual investors will be officially allotted shares on April 11, and this is also when any excess subscription monies, if any, will be refunded back. The price range (Dh2.25 to Dh2.48) at which you, as a potential investor, can subscribe to DEWA IPO shares was published on March 24.

9. The final offer price will be announced on April 6. The opening of subscriptions today, according to analysts, will generate the biggest response yet for an IPO in Dubai.

Attractive dividend payouts

DEWA plans to pay a first dividend payment of Dh3.1 billion after the IPO offering by October. (In January, the entity had made a dividend payment of Dh10 billion to the Dubai government.)

“With the Dh6.2 billion a year dividend commitment, this indicates a yield of 5 per cent or higher," said Sameer Lakhani, Managing Director at Global Capital Partners.

Sameer Lakhani

“That immediately places the yield higher than the banks listed on DFM as well as other blue-chips. A 5 per cent dividend is as good as it gets for those investors eyeing a steady return.”

“The dividend policy is designed to reflect the group’s expectation of strong cashflow and expected long-term earnings potential, while allowing the group to retain sufficient capital to fund ongoing operating requirements and continued investment for long-term growth.”

Investor mantra for DEWA

With a dividend yield of 5 per cent or higher, based on initial projections, individual and institutional interest in the IPO will hit its stride in the next 48 hours and maintain that pace all the way up to April 2 and April 5, which are the dates for the closing of subscription to these categories.

Tariq Qaqish

"It is important for investors to diversify their portfolios into different sectors and be able to rotate allocation during different economic environments,” said Tariq Qaqish, CEO at UAE's Salt Fund Placement. "DEWA offers this diversification for investors, especially it has been very successful and has a long track record."

Retail investors can sign up for a share of the 3.25 billion shares being offered between now and April 2. Institutional and foreign investors as well as DEWA employees too will be participating in what is Dubai’s biggest stock market float to date. (Institutional investors have until April 5 to submit their interest.)

The share price suggests a future yield that is easily at the top range for companies listed on the Dubai Financial Market. (The yield is based on the company’s stated dividend policy, with DEWA confirming it will be paying a minimum of Dh6.2 billion a year from October this year to April 2027.)

Big names back DEWA

The DEWA IPO has already gotten some big names as investors, including Abu Dhabi’s ADQ and Alpha Dhabi Partners. The other ‘cornerstone investors’ to sign up are Emirates Investment Authority, the UAE Strategic Investment Fund, the Multiply Group and Investment Holdings.

These investors have committed to purchase shares in the ‘qualified investor offering’ of the DEWA IPO. Together, they have committed to Dh4.7 billion, and when allocated shares will be subject to a 180-day lock-up arrangement. (Cornerstone investors are those who commit to an IPO in advance for a fixed amount of money or for a fixed number of shares.)

Saeed Mohammed Al Tayer

“This IPO represents an opportunity for investors to participate in a unique growth story that is underpinned by the ambition of Dubai and the UAE,” said Saeed Mohammed Al Tayer, Managing Director and CEO of DEWA.

“Since announcing our intention to float, we have received strong interest from local and international investors that recognise our determination to shape a green future for Dubai.”

Given that global financial markets are trading at near all-time highs, global fund managers are looking for high-quality assets to diversify their portfolios and the Dubai government-owned assets can perfectly fit the need.

So far, on the DFM, real estate companies, telecom major du, and — to an extent — banks have been the most actively traded. In recent years, trading volumes have been on the lower side, compared to where the market was between 2005-08.

Analysts say the DEWA listing will trigger a shift in this trading pattern, and with foreign investor interest, it can create substantially more volumes.