The family owners of remittances and money exchange firm Al Ansari Financial Services plan to sell a 10% stake in its Dubai initial public offering, marking the emirate’s first listing this year.
(Bloomberg) — The family owners of remittances and money exchange firm Al Ansari Financial Services plan to sell a 10% stake in its Dubai initial public offering, marking the emirate’s first listing this year.
Al Ansari Holding LLC will offer 750 million shares in the listing, according to a statement on Thursday. Al Ansari will take orders from retail investors from March 16 to March 23, and institutional investors until March 24. The listing is slated for on or around April 6.
The IPO is set to be the first in Dubai this year after the city recorded the largest offering in the Middle East in 2022 when Dubai Electricity & Water Authority PJSC’s raised $6.1 billion. In total, IPOs in the city raised a combined $8.5 billion last year in a privatization drive to increase trading volumes and catch up with listing activity in neighboring Abu Dhabi and Riyadh.
The region has been a bright spot for IPOs globally after high oil prices buoyed stock markets and drove investor inflows. Last week, Abu Dhabi National Oil Co. pulled off the world’s biggest listing so far this year when it raised $2.5 billion from the IPO of its gas business.
Privately Owned
Al Ansari will be one of the first IPOs by a family-owned business in the UAE, where most of the listing candidates have recently been state-owned. Dubai is encouraging private and family-owned businesses to list, though the mixed performance of last year’s IPOs might deter potential issuers.
Out of last year’s five offerings in Dubai, school operator Taaleem Holdings PSC was the only privately-owned company to go public. It has dropped about 13% from its offer price since listing in November.
“It is important to preserve, especially when you reach a certain size, to ensure that you have the continuity of the business institutionalized,” group Chief Executive Officer Rashed Ali Al Ansari, said at a media briefing. “We want to encourage other family-owned businesses as soon as they reach a certain size of operation to actually list on a stock exchange. It preserves it for the generations to come.”
Al Ansari Exchange was set up almost 60 years ago and currently has over 230 branches in the UAE, making it one of the largest exchange companies in the country. In addition to exchange services, it offers remittances, services for paying domestic workers, savings plans and cash management solutions for companies, according to its website.
Remittances
The UAE is the world’s second-largest outward personal remittance market due to its large expatriate workforce. Remittances accounted for 64% of Al Ansari’s operating income last year, according to its prospectus.
The CEO said the company was looking into expanding in markets beyond the UAE and Kuwait, particularly to those with high expatriate populations.
The Gulf Cooperation Council countries “contribute 25% of the global personal remittances around the world,” Al Ansari said. “So we are already in Kuwait, we are considering other GCC countries as well.”
Retail investors will be allocated 5% of An Ansari’s offering and institutional investors the remainder. Emirates Investment Authority will be entitled to subscribe to as much as 5% of the IPO.
Al Ansari posted a net profit of 595 million dirhams in 2022 and expects to pay a dividend of at least 600 million dirhams for 2023, double what it had declared last year. The company is planning a minimum payout ratio of at least 70% of net profit after that, it said.
Read: Dubai to List 10 State Firms in Bid to Reverse Falling Trade
Abu Dhabi Commercial Bank, EFG Hermes and Emirates NBD Capital are managing the IPO.
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