A.SREENIVASA REDDY (ABU DHABI)
It has been an eventful calendar for initial public offerings (IPOs) in the UAE in 2024, and the next year too looks promising.
Seven IPOs in 2024 raised over Dh22 billion from the market, testifying to the robustness of the UAE's capital markets.
Lulu Retail, NMDC Energy, ADNH Catering, and Alef Education were listed on the Abu Dhabi Securities Exchange (ADX), while Talabat, Parkin, and Spinneys debuted on the Dubai Financial Market (DFM) after running successful IPO campaigns.
If we look at the IPOs of 2024, all of them were oversubscribed several times. At ADX, Lulu Retail was by far the biggest, raising Dh6.21 billion from the market after selling 30% of its shares. The offering achieved aggregate demand of over Dh135 billion and was oversubscribed by more than 10 times by over 82,000 investors across all tranches. Its market cap at the time of listing was Dh21.07 billion. Lulu Retail also happens to be the 100th listing at the ADX.
Another big listing on ADX was NMDC Energy, which raised Dh3.22 billion by selling a 23% stake. It attracted a total demand of Dh88 billion after being oversubscribed by 31.3 times, achieving a market cap of Dh14 billion at the final offer price.
ADNH Catering, a subsidiary of Abu Dhabi National Hotels (ADNH), raised Dh864 million by selling 40% of its ownership in the market. It drew demand worth Dh13 billion, oversubscribed by 15 times. It had a market capitalisation of Dh2.16 billion at the time of the listing.
Alef Education, a player in the education sector, raised Dh1.89 billion through the sale of a 20% stake. The offer was oversubscribed by 39 times, generating demand of Dh74 billion. Its market capitalisation at listing was Dh9.45 billion.
MAIR Group, which has its roots in the cooperative movement in the UAE, also got listed at the ADX directly without going for an IPO. Over 12,000 shareholders of the company saw their shares being traded at over 100% premium on the ADX.
The biggest listing of the UAE and the region was Talabat, which raised Dh7.5 billion by selling 20% of its shares. Talabat reported its IPO was oversubscribed in “double digits”, though no specific figures on demand were disclosed. At the final offer price, its market cap was Dh37.3 billion, surpassing Lulu Retail. Talabat is also said to be the largest technology IPO globally.
Spinneys, an operator of premium supermarkets, raised Dh1.38 billion by selling a 25% stake. It generated Dh71 billion in demand after being oversubscribed 64 times. Its market capitalisation at listing was Dh5.51 billion.
Parkin, another DFM listing, attracted unprecedented demand of Dh259 billion after being oversubscribed by 165 times. It raised Dh1.574 billion by selling a 24.99% stake. Its market capitalisation at listing was Dh6.30 billion.
Reflecting on the year, Samer Mardini, Chief Investment Officer at Yorklyn Asset Management, said: “The UAE's markets, especially ADX and DFM, had a great year in 2024. We saw some big IPOs, like Lulu Retail and Talabat, raising billions and showing how strong investor confidence is, especially in retail and tech. For 2025, things are looking even better. There are great opportunities in sectors like healthcare and tech.”
However, a contrasting perspective came from Mayank Sawhney, Managing Director at MaxGrowth Consulting, who warned: “The outlook for IPOs in 2025 does not look as great as 2024 due to signs of a global economic slowdown in 2025. Investor sentiment, liquidity, and valuations might suffer, and many corporates eyeing an IPO may wait to see how these factors pan out.”
Despite the hype around IPOs, their post-listing performance has been mixed. According to Century Financial, three of the seven IPOs are giving positive returns on their offer prices. Parkin is giving a 124.3% return, Spinneys is giving 4.6%, and NMDC Energy is giving 3.2%. However, large names like Talabat and Lulu Retail have declined by 10% and 7.4%, respectively, post-listing.
Despite challenges, the IPO market in 2025 looks promising. The UAE is set to remain the leading venue for listings in the Europe, Middle East, and Africa (EMEA) region for the third consecutive year, according to Bloomberg.
Potential IPO candidates include Etihad Airways, Dubizzle, Five Holding, and Alpha Data. Etihad Airways is expected to raise up to $1 billion. Dubizzle could raise $500 million to $1 billion. Five Holding is anticipated to raise $2 billion. Alpha Data may raise up to Dh200 million.
The UAE’s focus on non-oil economic diversification and investor-friendly policies continues to attract global attention. Non-oil activities now contribute over 70% of the UAE’s GDP, underscoring its resilience and economic vibrancy.
Rami Sidani, Head of Frontier Investments at Schroder Investment Management, added: “The IPO boom has positioned Middle Eastern markets prominently in global indexes. This makes it harder for international fund managers to ignore the region.”