Tecom Group raises Dhs1.7 billion for its IPO

Inayat-ur-Rahman, Business Editor

Tecom Group said on Monday it raised Dhs1.7 billion ($462.87 million) from investors for its initial public offering (IPO). The company announced its plan on June 8 to sell a 12.5% stake by offering 625 million ordinary shares in its public offering.

Tecom set the final price for its offering at Dhs2.67  a share, it said in a statement. The shares are expected to list on or around July 5.

“As a result of the extremely strong demand, the final offer price was set at the top of the price range and the company has raised Dhs1.7 billion  through the IPO,” the company said.

The Global Offering drew substantial demand from both the Qualified Institutional Offer and UAE Retail Offer (as defined in the International Offering Memorandum) with total gross demand reaching Dhs35.4 billion, implying an oversubscription level of over 21 times in aggregate at the final price.

The UAE Retail Offer achieved an oversubscription level of almost 40 times in aggregate, making it the highest oversubscription multiple ever for IPOs on the Dubai Financial Market (“DFM”). As a result of the extremely strong demand, the final offer price was set at the top of the price range and the Company has raised Dhs 1.7 billion through the IPO.

Malek Al Malek, Chairman of Tecom Group said: “The tremendous demand we drew both locally and internationally for the Tecom Group IPO, especially amid challenging market conditions, is testament to the Company’s appealing value proposition and growth prospects. Investors’ strong appetite is underpinned by their optimism toward Dubai’s economy and confidence in the Emirate’s capital markets.

We are incredibly proud to have received the highest ever oversubscription multiple in the retail tranches for any IPO on the DFM, demonstrating the trust that this important investor base has in Tecom Group as an investment. It is also a strong validation of the Company’s reputable market position as a strategic enabler of knowledge-based sectors in the Emirate.”

As previously announced, the Global Offering comprised an offering of 625 million (625,000,000) ordinary shares, representing 12.5% of TECOM Group’s issued share capital, all of which is expected to be listed on the DFM on or around 5 July 2022. Upon listing the Company will have an implied market capitalization of Dhs 13.4 billion and DHAM LLC will continue to own a majority 86.5% stake in the Company (or 87.5% together with DHAM FZ-LLC).

Tecom Group is expected to commence trading under the symbol “TECOM” and ISIN “AEE01081T004”.  Investors that participated in the UAE Retail Offering will be notified of their allocation of shares via SMS on 29 June 2022.

Wael Makarem, Senior Market Strategist, MENA at Exness told Gulf Today that GCC stock markets recorded mixed performances and some markets saw positive developments. Some in the region followed other international markets to the upside as they continued to rebound from their latest price corrections.

“The Dubai stock market moved higher, supported by the rebound in international markets and the successful IPO of Tecom. The offering has shown investors’ interest in Dubai but the market remains exposed to price corrections in the currently challenging global conditions.”

“The Abu Dhabi stock market rebounded after price corrections thanks to the rally in world markets. The main index could also see a boost if oil prices return to the upside.”

“The Saudi stock market remained volatile and weighed by the volatile oil prices and the uncertainties in the energy markets. The main index could be poised to see a recovery period after a month of declines.”

“Oil prices were volatile as investors eye the G7 nations’ meeting which could lead to new sanctions against Russia and impact the supply side. At the same time, crude markets remain exposed to the concerns around slowing economic growth.”

“The Egyptian stock market continued to fall under the weight of the selling pressure as international investors accelerated their retreat from the market. The Egyptian market remained exposed to the development in the aftermath of the G7 nations’ meeting concerning Ukraine.”

he completion of the Offering and Admission is currently expected to take place on 5 July 2022, subject to market conditions and obtaining relevant regulatory approvals in the UAE, including approval of Admission to listing and trading on the DFM. Details of the Offering are available in the UAE Prospectus with respect to the UAE Retail Offering and the English-language International Offering Memorandum with respect to the Qualified Investor Offering.