State-owned Dubai Electricity & Water Authority (DEWA) plans to sell a 6.5% stake in an initial public offering in what could be the city’s biggest listing, according to a Bloomberg report.
The offer price range will be announced on March 24 with an expected trading debut on April 13, according to an advertisement published by the utility in a local daily. The banks managing the proceedings are Emirates NBD, First Abu Dhabi Bank and HSBC Bank.
DEWA will offer 3.25 billion shares of the company’s capital, representing 6.5% of the total shares, in an initial public offering from March 24, and listing on the Dubai Financial Market will take place on April 13, 2022.
According to the prospectus, the final offering price will be determined by following the share price-building mechanism, whereby a record of subscription orders is created through subscription requests submitted only by professional investors.
The offering price range will be published and announced on March 24 before the subscription. The offering period begins on March 24 for the first, second and third tranches and ends on April 2 for the first and third tranches and on April 5 for the second tranche.
Shares will be offered for the first tranche according to the prospectus, and 8% of the offering shares, which represent 260,000,000 shares, will be allocated for the first tranche. Some 90% of the offering shares, which represent 2,925,000,000 shares, are allocated to the second tranche, which is limited to “qualified investors”.
Shares are offered for the third tranche according to the prospectus, and 2% of the offering shares, which represent 65,000,000 shares, are allocated to the third tranche, which includes DEWA employees.
Spate Of Investments
According to the EY MENA IPO Eye Q4 2021 report, the MENA region saw 21 IPOs raise proceeds of US$7.9 billion in 2021, an increase of 133% in total issuances and 325% in total proceeds when compared to 2020.
The year’s biggest IPOs in value in MENA were in the utilities, energy and financial services sectors, with Saudi Arabia’s International Company for Water and Power Projects (ACWA Power Company) leading with proceeds of $1.21 billion on the Tadawul.
The Tadawul main market saw five IPOs in Q4 alone, with a further two on the Nomu-Parallel Market. The region’s second largest IPO in value in 2021 was in the energy sector, with the ADNOC Drilling Company securing proceeds of $1.1 billion in Q4 on the Abu Dhabi Securities Exchange (ADX).
Major market activity returned to the MENA region, with thirteen issuances raising $5.6 billion in proceeds for the year. Globally, 2021 was the most active year for the IPO market for over 20 years, with a total of 2,388 deals raising $453.3 billion in proceeds – a 64% and 67% respective increase Y-O-Y.
Europe, the Middle East, and Africa exchanges produced the highest growth seeing a 158% increase in the number of IPOs (724) and a 214% increase by proceeds ($109.4 billion). The Riyadh-based Arabian Internet & Communications Services raised $966 million.
Towards the end of the year, Dubai announced the listing of 10 government and state-owned companies on the Dubai Financial Market (DFM) as part of accelerating new listings in various sectors, including energy, logistics and retail.
Dubai which missed out on last year’s IPO boom in the MENA, is further planning to encourage private and family-owned businesses to list on its stock market to bring back much-needed activity and liquidity. Additionally, Dubai launched a $272.3 million Future District Fund to support technology companies and encourage them to list on the DFM.
DEWA caters to the city’s 3.4 million residents. The utility has 13.4 gigawatts of power capacity as well as 490 million imperial gallons of desalinated water each day.