KEY POINTS:
- The stocks of Dubai – predicated parking operator Parkin endured a swell of over 30% upon the company’s debut on the Dubai Financial Market.
- With its IPO raising 1.57 billion dirhams ($ 429 million), Parkin witnessed oversubscription by 165 times, performing in demand totaling 259 billion dirhams – marking a record for the Dubai Financial Market exchange.
In Dubai, United Arab Emirates, the shares of Parkin, a parking operator, endured a swell of over 30% on Thursday, March 21, 2024, as the company made its debut on the Dubai Financial Market.
With trading commencing, Parkin’s share price rose to 2.73 dirhams ($0.74), marking a largely positive prolusion for the United Arab Emirates’ first public table of the time. Firstly, priced at the upper end of the range at 2.1 dirham per share, Parkin attained a valuation of $1.7 billion.
Having raised 1.57 billion dirhams ($429 million) through its IPO, Parkin garnered inviting demand, being oversubscribed by 165 times, which amounted to a record- breaking 259 billion dirhams in demand for the exchange.
As the largest provider of paid parking in Dubai, Parkin is poised to meet adding demand with the municipality’s rising population. In the first half of 2023, Dubai witnessed a 63% swell in residency visas issued compared to the same period the former time.
Chairman Ahmed Hashem Bahrozyan remarked shortly after trading began on Thursday that, “There are clear suggestions that Dubai is on a growth line, and Parkin is an integral part of the municipality of Dubai. So as Dubai grows, it’s only natural that Parkin grows as well.”
The Dubai Investment Fund, Parkin’s owner, offered a 25% stake in the company’s table, with strong demand from state institutions and families, signaling robust interest in Gulf investment.
Parkin’s prospectus indicates that it’s offering a tip equal to 100% of profit or free cash flux to equity, whichever is advanced, “subject to distributable reserves conditions.”
When questioned about the company’s capability to sustain analogous payouts in the future, Bahrozyan expressed confidence, stating, “We are truly confident we can, as I said the position of growth in the municipality promises that we will grow. And we do have truly comprehensive and truly important plans for expansion. We promise that we will do our swish to maximize the value for all the shareholders.”
Parkin’s table follows a fairly quiet period for registries in Dubai, following an active time of public offerings in 2022 that saw multitudinous of the emirate’s major public utility and critical structure operators go public.
These included Dubai’s power and water utility DEWA, which conducted the municipality’s largest- ever IPO, raising 22.3 billion dirhams in April 2022, along with toll operator Salik, quarter cooling services provider Empower, and Dubai Taxi.
Parkin marks the sixth establishment to suffer an IPO as part of Dubai’s public table action, which commenced in 2021. The municipality aims to enhance liquidity and trading volume on its original stock exchanges to more contend with counterparts in Abu Dhabi and Riyadh.
Across the Gulf region, there has been a flurry of IPO exertion, with the maturity being in Saudi Arabia. In 2023, 35 Saudi companies went public, alongside eight in the UAE, two in Oman, and one in Qatar.
Fadi Arbid, founding partner and CIO of Dubai- predicated investment director Amwal Capital mates, characterized this trend as a “spree of IPO lagniappe,”.
He noted, “In Dubai, it’s a truly deliberate effort from the government to privatize some trophy assets, and also open them to the public and to investors encyclopedically. And Saudi Arabia is equally driven by the private sector and the government as well.”
Arbid stressed that IPOs in Saudi Arabia benefit from strong support from retail investors, contributing to a deep request. “It’s still a healthy channel,” Arbid remarked. “It’s all about the pricing now.”
Source: CNBC
