The shares of Abu Dhabi healthcare provider Burjeel Holdings surged as much as 20 per cent above the listing price on Monday as the company made its debut on the Abu Dhabi Securities Exchange.
The company, which started trading under the ticker symbol “BURJEEL”, jumped to Dh2.39 in early trading on the ADX, giving it a market value of more than Dh12.44 billion ($3.4bn).
Shares of the company settled 16 per cent above the listing price at Dh2.31 at the close of trading on Monday.
The company sold more than 550.7 million shares at the lower end of its offer share price of Dh2, raising more than Dh1.1bn from an 11 per cent stake sale in the company's initial public offering.
The IPO drew strong demand from investors in the UAE and the region, and was more than 29 times oversubscribed. Total gross demand was more than Dh32 billion.
VPS Healthcare Holdings will continue to own a 70 per cent stake in the company after today's listing.
Burjeel Holdings, founded in 2007 by Dr Shamsheer Vayalil, has a network of about 61 assets, including hospitals and medical centres, as well as pharmacies and other allied services throughout the UAE and Oman.
The company plans to enter Saudi Arabia, with investments of up to $1bn planned in the Arab world’s largest economy through joint ventures and public-private partnerships.
"Our IPO demonstrates our commitment to helping grow the UAE’s capital markets ecosystem through expanding the UAE economy and private sector, further cementing Abu Dhabi’s role as an attractive destination for investment," said Dr Vayalil.
The company intends to pay cash dividends from 2023 onwards, on the expected basis of a pay-out ratio of 40 to 70 per cent of net income, dependent on the required investment for additional growth plans.
Unlike capital markets in the US and Europe that have descended into bearish territory, the UAE has experienced a flurry of IPOs, with various government-owned companies listing.
ADX, the Arab world's second-largest stock market, recorded a surge in liquidity and foreign investment in 2021 on the back of new listings, anchoring it as one of the world’s best-performing equity gauges in 2021.
IPOs propelled the market value of the ADX to Dh2.24 trillion as of the close of trading on Friday.
Companies that have listed on the Abu Dhabi market this year include Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis, as well as Abu Dhabi Ports Group, the operator of industrial cities and free zones in the emirate.
Nine companies listed on bourse last year, including Adnoc Drilling, Fertiglobe, the world’s largest seaborne exporter of urea and ammonia combined, Alpha Dhabi, the property and construction company owned by IHC, and Yahsat, the satellite operator owned by Mubadala Investment Company.
Investment in the UAE's healthcare sector has picked since the onset of the Covid-19 pandemic. Companies are consolidating their assets to gain scale and add additional services such as diagnostics, testing and other support resources to better serve patients and increase their market share.
Dubai-listed investment company Amanat Holdings acquired Cambridge Medical and Rehabilitation Centre for $232m in one of the region's biggest healthcare deals last year.
In January, Abu Dhabi holding company ADQ merged its healthcare subsidiaries with Alpha Dhabi’s Pure Health Medical Supplies to streamline their portfolios, creating the UAE’s largest healthcare provider.