Today's Edition
A.SREENIVASA REDDY (ABU DHABI)
Talabat has announced a price range of Dh1.50 to Dh1.60 per share for its upcoming initial public offering (IPO).
This price range suggests a market capitalisation of Dh34.93 billion ($9.51 billion) to Dh37.26 billion ($10.15 billion) at the time of listing. The total offering size is expected to be between Dh5.24 billion ($1.43 billion) and Dh5.59 billion ($1.52 billion).
The top end implies a valuation of $10.2 billion for Talabat, slightly lower than its parent company Delivery Hero’s $11 billion market capitalisation in Germany.
The subscription period for the IPO began on Tuesday. Retail investors can subscribe until November 27, while institutional investors have until November 28 to participate. The final offer price is scheduled to be announced on November 29, with shares expected to list on or around December 10 on the Dubai Financial Market (DFM).
Nearly 3.5 billion shares are available in the offering, representing 15% of the company’s total issued share capital. All offered shares are existing shares held by parent company Delivery Hero.
The IPO comes amidst a robust fund-raising activity in the Middle East, with new share sales rising to about $10 billion in 2024. “Food delivery companies in emerging markets are showing strong growth, as evidenced by the stellar listing of Swiggy in the Indian market. With the UAE’s young tech-savvy population used to ordering deliveries, Talabat’s fundamentals are well supported, positioning the company’s IPO to perform well on its debut,” Vijay Valecha, Chief Investment Officer at Century Financial.
The company reserves the right to amend the size of the offering at any time before the end of the subscription period, subject to the approval of the Securities and Commodities Authority of the UAE.
“We are delighted to open subscriptions today for the Talabat IPO on the DFM, having seen strong local and international investor interest since announcing our intention to float,” said Tomaso Rodriguez, Chief Executive Officer of Talabat.
Cornerstone investors have committed a total of Dh918 million in the institutional segment of the IPO. Among these, the UAE Strategic Investment Fund has contributed Dh514 million, the Abu Dhabi Pension Fund has invested Dh220 million, and the Emirates International Investment Company has allocated Dh180 million. All shares were purchased at the upper end of the price range and are subject to a 180-day lock-up period following the listing.
Highlighting Talabat’s strong fundamentals, Mayank Sawhney, Managing Director of MaxGrowth Consulting, commented: “The Talabat IPO is going to attract significant interest from investors due to the strong brand value and significant year-on-year growth in revenues and profits. There is still a lot more scope for Talabat’s business to grow significantly in the MENA region over the next few years.”
Each successful retail subscriber, other than eligible employees, will be guaranteed a minimum allocation of 1,000 shares, while each eligible employee will be guaranteed a minimum allocation of 10,000 shares.
The UAE has experienced a surge in IPO activity this year. Companies such as Alef Education, NMDC Energy, ADNH Catering, and Lulu Retail successfully listed on the Abu Dhabi Securities Exchange (ADX), receiving strong investor interest. Similarly, Parkin and Spinneys achieved successful listings on the DFM.
