Al Yah Satellite Communications (Yahsat), a unit of Mubadala Investment Company, which raised Dh2.68 billion ($730 million) through its public offering, rose 1.8 per cent on its market debut in Abu Dhabi.
The company’s shares opened at Dh2.75 per share and rose as high as Dh3.10 before giving up some of its early gains and closing at Dh2.80 on the Abu Dhabi Securities Exchange. It was the most traded stock with about 107 million shares worth more than Dh322m changing hands on the bourse.
The ADX benchmark index advanced 0.47 per cent, with its market capitalisation hitting a record high of Dh1.26 trillion.
“Today’s listing of Yahsat on ADX marks a monumental achievement for Mubadala and Yahsat," said Musabbeh Al Kaabi, chief executive of UAE Investments at Mubadala and chairman of Yahsat.
"The listing of Yahsat is also a testament to the sophisticated investor appetite from local and international retail and institutional investors by attracting capital to Abu Dhabi’s financial markets and signals a growing demand for communications technologies.”
The company has sold 975.9 million, or 40 per cent, of its shares through the IPO, which was “multiple times oversubscribed”, with significant demand from both qualified institutional and retail investors in the UAE, Yahsat said on July 10.
The Emirates Investment Authority has exercised its preferential right to subscribe to 5 per cent of Yahsat’s final offering. The remaining 60 per cent of shares are held by Mubadala’s subsidiary, Mamoura Diversified Global Holding.
Yahsat last week priced its shares in the middle of an earlier indicative price range of Dh2.55 to Dh3.05 a share after the completion of the bookbuilding process. Yahsat’s market capitalisation, which was approximately Dh6.71bn at the beginning of trading, rose to Dh6.83bn.
Yahsat listing is the first major IPO on the Abu Dhabi bourse since Abu Dhabi National Oil Company Distribution listed 10 per cent of its shares in 2017. The state oil company subsequently sold another 10 per cent stake and raised $1.64bn in May through the sale of new shares and the issue of exchangeable bonds in Adnoc Distribution, potentially pushing its free float on the ADX to 30 per cent.
The small rise in Yahsat's shares indicates this "is a fairly priced IPO and leaves something on the table for investors”, Vijay Valecha, chief investment officer at Century Financial, said.
The volume of shares traded also demonstrated strong investor interest in the company and in the Abu Dhabi market, he added.
"For institutional investors and significant funds, liquidity is of paramount importance. Companies like Yahsat provide more depth to the market and are of paramount importance to the local financial markets," Mr Valecha said.
The ADX, which expects 10 new stock listings this year, plans to double its market capitalisation over the next three years through its “ADX One” strategy. The ADX has outperformed its peers in the Middle East, gaining more than 39 per cent rise since the beginning of the year. Saudi Arabia’s Tadawul has risen about 23 per cent while Boursa Kuwait has advanced more than 14 per cent over the same period.
"The listing of Yahsat has also further enhanced the market capitalisation of the ADX following the landmark Dh1tn milestone that it recently surpassed. In the coming period, we will continue to roll out new products and services to deepen market liquidity and access to finance," Saeed Al Dhaheri, chief executive of the ADX, said.
Yahsat was founded in 2007 and now operates in more than 150 countries across five continents. Its five satellites reach more than two-thirds of the world’s population. A sixth is expected to launch in the second half of 2023 and begin commercial operations 12 months later. The company provides its satellite infrastructure to both government and commercial customers.
Yahsat made a profit attributable to its owner of $68.9m last year, more than doubling from $29.9m at the end of 2019, despite a 7 per cent fall in revenue to $407.5m, the company said in a bourse filing on Tuesday.
Net income for three months to the end of March rose to $15.89m, from $11.2m for the same period in 2020, the company said.
Yahsat has a 15-year agreement with the UAE government signed in 2011 that provides “cash flow and visibility” of revenue and is an “important component of the country’s National Space Strategy”, it said last week.