Dubai-based parking management company Parkin has raised Dh1.57 billion (about $427.5 million) from its initial public offering (IPO) after setting the final price for the offering at Dh2.1 per share, the top end of a previously announced price range.
The company, which will offer a stake of about 25 percent, said that the demand for the subscription exceeded the offered shares by about 165 times, as the company received requests worth an estimated 259 billion dirhams (about 71 billion dollars) from local, regional and international investors, in a clear indication of the strong demand for initial public offerings in the UAE.
The company’s initial public offering is the emirate’s first privatization this year. The offering means the company’s total value is estimated at about 6.3 billion dirhams (about $1.7 billion), with the Dubai Investment Fund selling 749.7 million shares, or a 25 percent stake, in the public offering.
The Parkin IPO is the sixth privatization by the Dubai government as part of a plan unveiled in late 2021 to list 10 government-owned companies to boost trading volumes on the Dubai Financial Market.
Parkin announced in a statement that its shares are expected to start trading on the Dubai Financial Market on March 21.
Barkin is the latest Gulf listing to attract huge levels of demand as investors bet on lucrative dividends as well as strong share price performance of new companies.
Dubai's latest IPO, the $315 million Dubai Taxi IPO, received orders worth $41 billion.
In a related context, Parkin expects the demand for public parking to grow by 60 percent by 2033.
Following the completion of the offering, Parkin plans to distribute semi-annual dividends to its shareholders in April and October, with the first dividend expected to be distributed in October 2024 for the first half of 2024, with investors purchasing shares eligible for the full dividend distribution for the first half of 2024.
For the full fiscal year 2024 and beyond, the minimum dividend distribution will be the higher of the following two options: (1) 100% of annual profits, and (2) free cash flow to equity subject to distributable reserve requirements.
