Dubai Investments, a diversified company in which the sovereign wealth fund Investment Corporation of Dubai holds a stake, plans to take four of its subsidiaries public amid the continued momentum for initial public offerings in the region.
The company, listed on the Dubai Financial Market, operates business units across a number of sectors including real estate, building materials and construction, education, financial services and others.
“We think that there are at least four companies in the portfolio worth looking at for IPO,” Khalid bin Kalban, vice chairman and chief executive of Dubai Investments, told The National.
“We have looked at a couple [of companies] … we talked to the local authorities with [regards to] our intention to IPO. The discussion is going on now [around] what multiples we are going to get and what value we are going to get for our divestments.”
However, he did not reveal details of which business units Dubai Investments aims to take public and where they would be listed but said financial advisers are currently looking into each and every company in the portfolio.
“We'll see which one is there … a better one to start with, but hopefully we'll move forward,” Mr bin Kalban said.
In real estate, it operates companies including Properties Investment, Al Mal Capital Reit, Dubai Investment Real Estate, Al Taif Investment and Dubai Investments Park.
In building materials and construction, Dubai Investments has subsidiaries including Emirates Building Systems and Emirates Float Glass. Its other business units include Globalpharma, Global Fertility Partners, Al Mal Capital and district cooling company Emicool, among others.
Dubai Investments has a portfolio worth Dh2 billion ($544 million) in building materials and construction sector with plans to add Dh1 billion to the portfolio this year as it plans expansion in Abu Dhabi, Dubai and Saudi Arabia, according to Mr bin Kalban.
In the real estate sector, it has assets worth more than Dh15 billion with projects in Dubai and Ras Al Khaimah and its financial portfolio is valued at about Dh5 billion with investments in bonds and equities and private and listed companies.
Dubai Investments' total assets by the end of the third quarter of last year stood at Dh22 billion.
“I like to reach a maximum [Dh]25 billion, and then start offloading some of the companies, or exiting from some of the companies,” Mr bin Kalban said.
“I am not a believer in big assets and big companies. I believe in [an] efficient company, the right size and [one creating] good return for our shareholders.”
Dubai Investments' plans come as IPO momentum continues in the Middle East, with the region's economies moving ahead with their diversification strategies.
Last year, a number of companies listed their shares on regional stock markets including food delivery platform Talabat Holding, Lulu Group, Oman's oil and gas company OQEP, ADNH Catering, a unit of Abu Dhabi National Hotels, NMDC Energy, a unit of Abu Dhabi contractor National Marine Dredging Company, and Alef Education, among others.
The IPO market is booming in the UAE on “liquidity improvement”, Mr bin Kalban said, adding that the government is focused on diversifying the companies that are listed on the DFM, with the listing of toll gate operator Salik, Parkin, Empower and Dubai Electricity and Water Authority.
As a financial centre, “you have to have as many as companies as possible and as diversified as possible”.
The regional markets bucked the global trend where IPO activity remained muted amid a global economic slowdown, market volatility and geopolitical shifts.
In the third quarter of last year, volumes fell by 14 per cent annually to 310 IPOs and proceeds by 35 per cent to $24.9 billion, according to an EY report.
In November, the UAE stock markets topped $1 trillion in aggregate market capitalisation, primarily driven by IPO momentum, as well as strong earnings.
