Dubai Electricity and Water Authority (DEWA) will start trading of its shares tomorrow (April 12), amid huge expectations from both domestic as well as global investors. It is expected to be the biggest by market capitalization and committed to a minimum annual dividend of $1.69 billion over the next five years.
DEWA’s IPO raised $6.1 billion on the Dubai Financial Market (DFM) as the listing of 18% of its shares is described as the largest in the MENA region since Saudi Aramco went public in 2019.
The IPO includes commitments from cornerstone and strategic investors such as UAE’s Sovereign Wealth Fund (SWF) the Emirates Investment Authority (EIA), Abu Dhabi’s state-owned investor ADQ, the UAE Strategic Investment Fund, Multiply Group, Alpha Dhabi Partners and Investment Holdings were confirmed as cornerstone investors in the listing totaling $3.76 billion. The Government of Dubai will retain an 82% stake.
As public demand for more shares soared, DEWA increased the size of its listing from 3.25 billion to 9 billion shares, but the offering was still 37 times oversubscribed in the retail portion of the IPO.
DEWA, whose assets are valued around $170 billion at present, has announced that it will be launching $23.41 billion worth water and electricity projects by 2026 as the demand for water and power is expected to rise due to its growing population.
DEWA is not the first company to go public and has been part of Dubai government’s plans to have at least 10 state-owned companies to get listed on the Dubai’s bourse to boost the size of the market this year.
Earlier, the IPO of Abu Dhabi (AD) Ports Group, which was listed on the Abu Dhabi Securities Exchange (ADX) raised $1.1 billion in proceeds from the primary issue.
Further, listings from Abu Dhabi’s SWF ADQ assets are expected, notably in the new entity created from the merger of Arkan and Emirates Steel to create the UAE’s biggest steel and buildings material company, majority owned by sovereign wealth fund ADQ’s Senaat.
Meanwhile, Reuters reported that Dubai school operator Taaleem has been in preliminary talks with banks for an initial public offering in Dubai, a transaction that would test market appetite for UAE’s education sector.
The private education sector in the UAE is recovering from a slowdown during the peak of the coronavirus pandemic. Schools have been under pressure with higher operational costs and families departing from the UAE in the first year of the pandemic or opting for remote learning at schools abroad.
The Dubai government last week decided to freeze tuition fees for the year 2022-2023, its third year in a row to help ease the financial burdens on parents.
Taaleem operates 17 private schools in Dubai and Abu Dhabi under American and British curriculums, in addition to the International Baccalaureate programme.