Dubai’s DEWA Seeks Up to $2.2 Billion in Landmark IPO
, Bloomberg News
(Bloomberg) — Dubai’s main power and water company is looking to raise as much as $2.2 billion in its initial public offering, in what would be the emirate’s biggest listing since DP World in 2007.
Dubai Electricity & Water Authority will sell 3.25 billion shares at 2.25 dirhams to 2.48 dirhams apiece, valuing the utility at $33.8 billion. The listing marks the first step in Dubai’s ambitious plan to reinvigorate its flagging capital markets.
DEWA is seeking to take advantage of strong investor interest for new share offerings in the region even as equity markets around the world are roiled by Russia’s invasion of Ukraine, rising inflation and hawkish central bank policies. High oil prices have been a boon for the energy-rich Persian Gulf, however, allowing IPOs to go ahead while issuers elsewhere sit on the sidelines.
Dubai missed out entirely on an IPO rush that swept the Middle East last year and saw offerings draw in tens of billions of dollars of demand. To boost trading volumes and catch up with rivals Abu Dhabi and Riyadh, the city set out a plan to list 10 state-owned companies, including DEWA, in the hope that would then encourage other private and family-owned businesses to go public.
Heavily reliant on tourism and real estate, the city has seen just one $95 million IPO since 2017, data compiled by Bloomberg show. Meanwhile Abu Dhabi broke a four-year listings hiatus with three offerings in 2021, the largest of which – Adnoc Drilling – attracted over $34 billion in orders.
DEWA has said it will aim to pay an annual dividend of 6.2 billion dirhams ($1.69 billion) for the next five years. The top end of the IPO pricing gives it a dividend yield of about 5%.
The utility plans to price the shares on April 6 and start trading in the second week of April.
Citigroup Inc., Emirates NBD Bank and HSBC Holdings Plc are managing the share sale. Credit Suisse, EFG-Hermes, First Abu Dhabi Bank and Goldman Sachs Group Inc. are also involved as bookrunners.
(Updates with valuation of DEWA in second paragraph)
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