Parkin Hopes to Raise Around $430 Million Through Its IPO on DFM

Parkin, the Dubai parking spaces operator, on Tuesday set a price range of $0.54 to $0.57 per share for its IPO, for which subscription opened this morning and will continue through till March 13. The IPO is the first one from an affiliate of Dubai’s Road Transport Authority (RTA) in 2024, and the company expects to raise around $430 million.

The share price range is well in line with the slight ‘premium’ that market watchers were expecting. When Parkin had issued its prospectus last week, the market watchers said that the price per share would be around $0.54.

Today’s price range sets up a $410 million to $430 million for Parkin, which will be listed on Dubai Financial Market (DFM) on 21 March 2024. Parkin is offering 749.7 million shares (or 24.9%), which means the overall value of the company thus comes in at $1.72 billion at the top end.

Announcing the company’s intention to proceed with IPO, Parkin CEO Mohamed Al Ali said that his company provides a critical infrastructure to the Emirate with a systemic role in enabling mobility to support the city’s expansion plans.

“As Dubai continues to grow, our company will grow with it. The IPO will enable us to build on and accelerate our success; driving further innovation, delivering strong financial performance, and realizing the potential of our growth platform to scale up and diversify. Testament to our attractive equity story, we are pleased to have received strong interest from investors following our intention to float on the DFM,” he said.

According to Parkin, each retail subscriber will receive a minimum of 2,000 shares each. But that is conditional on the kind of over-subscription Parkin will receive. If the over-subscription exceeds a certain level, the number of minimum shares received could be lower than 2,000.

Investment Highlights

The company is poised to benefit from Dubai’s ambitious economic and population expansion plans as The Dubai 2040 Urban Master Plan seeks to grow the population of the Emirate by approximately 60% by 2040 with plans to host 400+ global events and attract 25 million tourists per year by 2025.

Private cars are the dominant mode of transportation in Dubai, owing to the Emirate’s high-quality road infrastructure, low energy prices, affordable costs of ownership and low average time per rush hour compared to other global cities. As a result, the number of registered vehicles in Dubai is expected to increase by 4% per annum on average to 2033.

In line with these growth rates, the demand for public parking in Dubai is expected to increase by 4.8% per annum on average over the next ten years, driving 60% growth by 2033. These trends are supported by ambitious economic plans by the Dubai Government to double the size of Dubai’s economy over the next decade.

As of 31 December 2023, Parkin operates approximately 179,000 paid public parking spaces across the Emirate, 75% of which are on-street parking spaces. Of the total paid public parking spaces, the Company operates nine Multi Storey Car Parks (MSCPs) in high density areas across the Emirate with approximately 4,000 parking spaces in total.

Additionally, Parkin has seven existing contracts in place with private developers across Dubai’s footprint, managing approximately 18,000 parking spaces in total, with significant potential for expansion in existing and developing areas.