Shares of Al Ansari Financial Services, the UAE money exchange and transfer company, surged more than 19 per cent at the start of trading on Thursday as the company made its debut on the Dubai Financial Market.
Shares of the company, which started trading on the DFM under the ticker symbol “ALANSARI”, rose to Dh1.23 at the start of trading. They closed 16.51 per cent higher at Dh1.20.
Al Ansari sold 750 million shares and set the final share price at Dh1.03, the higher end of its Dh1-Dh1.03 offer range, implying a market capitalisation of Dh7.73 billion ($2.1 billion) at listing.
The company drew $3.45 billion in bids for its initial public offering that raised $210 million from the sale of a 10 per cent stake, with the offering oversubscribed 22 times on average.
The listing "will set us on a new and exciting chapter in our 57- year history", said Mohammad Al Ansari, chairman of Al Ansari.
"The success of this transaction will further support the UAE’s ambitions of deepening and diversifying its capital markets by inspiring other family-owned businesses to follow in our footsteps."
National Bonds Corporation — owned by the Investment Corporation of Dubai, the investment arm of the Dubai government — committed to a cornerstone investment worth Dh200 million in the IPO.
Al Ansari's listing "supports our diversification strategy and Dubai's commitment to developing its capital markets", said Helal Al Marri, chairman of the DFM.
"Most importantly, it sets an encouraging precedent for other family businesses to follow suit and help boost economic growth and investor confidence in the UAE."
Al Ansari expects to distribute a minimum dividend of Dh600 million ($163 million) for the 2023 financial year, implying a minimum dividend yield of 7.77 per cent to 8 per cent.
The first-half dividend payment will be made in October 2023 and the second-half payment in April 2024.
The IPO drive in the Middle East has continued to gather pace this year after the region registered 48 listings in 2022 that raised more than $23 billion last year, compared with $7.52 billion from 20 offerings in 2021.
That was the highest share for the Gulf region after 2019, when Saudi Aramco went public in a $29 billion offering, the world’s largest.
Last month, Adnoc raised about $2.5 billion from the sale of a 5 per cent stake in its gas business, marking the year's largest listing so far globally.
The Adnoc Gas listing was about 50 times oversubscribed and drew more than $124 billion in orders.
Al Ansari Exchange was set up about 60 years ago and has 231 branches in the UAE, offering exchange services, remittances, a system to pay domestic workers and savings plans.
The company opened its first exchange branch in the UAE in 1966. It also operates in Kuwait.
Al Ansari's IPO is part of a strategy to reposition the company for its next phase of growth, with proceeds from the offering going to parent entity Al Ansari Holding.
The UAE is the second-largest outward personal remittances market globally, with a total value of $48 billion, Al Ansari said last month, citing a report by Edgar, Dunn and Company.
Al Ansari registered 22 million personal remittance transactions last year, with the money remitted increasing by 4.8 per cent to Dh737 million in 2022, compared with the previous year.
The company expects digital transactions to account for about a fifth of personal outward remittance transactions by 2027, up from 15 per cent in 2022.
Al Ansari believes exchange houses will continue to play a significant role, given the large and growing low-income resident population that do not have access to a bank account.
The company's net profit grew by 21 per cent to Dh595 million in 2022, compared with the previous year, and was up 59 per cent on its 2020 results.
